Going beyond the free toaster as competition tightens

Going beyond the free toaster as competition tightens

JAKARTA (JP): As competition among credit cards grows fiercer, card issuers have begun to offer gifts and rewards to attract members or encourage holders to use their cards more often.

The gifts range from a simple pen to an all-inclusive trip to Christmas Island.

American Express (Amex) is an example.

With 38,000 card holders in Indonesia, Amex is currently the most used charge card in the country. However, since most of its card holders have more than one card -- they average three to four cards -- Amex must push its members to use its card.

A reward program was launched early last month. The launching made Indonesia the 22nd country in the world to implement Amex's membership rewards program.

"Unlike other banks, we offer a lifestyle by presenting those who use our cards with real rewards like an all-inclusive package to Christmas Island," Roy Tan Hardy, the director for marketing and sales for Amex Travel Related Services Indonesia, told The Jakarta Post.

The program allows card members in Indonesia to earn a point for every Rp 2,500 (US$ 1) they charge to their account. The points can be accumulated to procure the 40 lifestyle rewards available. Some of the rewards include movie previews, dinner for 10 at the Oasis restaurant, a P&O Spice Island cruise, a free round of golf at selected championship courses, savings on BMWs and Cherokee Jeeps, an all-inclusive Christmas Island package, two nights in an executive suite in selected first-class resorts and a Eurail Pass for two.

But the rewards cannot be earned automatically. A card member must first enroll and choose between the frequent flyer program and the non-traveler option.

Frequent Traveler

Besides basic rewards, members who choose the frequent flyer option can earn free flights through Passages, which cooperates with Amex and is the largest frequent flyer program in Asia.

Passages currently includes Cathay Pacific Airways, Malaysia Airlines, Singapore Airlines, Swiss Air, Silk Air, Delta Air Lines, British Airways, Austrian Airlines and All Nippon Airways.

Accumulated points can be used to supplement the Passages points. A free air ticket can be obtained after 40,000 kilometers.

"If your points have accumulated to 69,000, for example, and your Passages points have reached 36,000, a total of 4,000 points can be transferred to the Passages points so that you can get a free air ticket," explained Roy.

A frequent stayers program will be launched soon, said Roy. The program will allow members to earn points for free rooms at Sheraton or Westin hotels around the world.

"We also offer an unique experience. In the U.S., one of the rewards is a half-hour flight in a MiG jet fighter. In Indonesia we're going to offer what our card members want to experience. We may, for example, present bungy-jumping in Bali," Roy pitched.

Indonesian card holders can get the prizes offered by Amex offices in the other 21 countries.

Expatriates can also transfer points they have accumulated in other countries to Indonesia.

"We're not telling our customers to spend more, we only ask those who still like to use cash or cheque to replace them with plastic," said Roy, adding that in other countries the reward program usually boosts spending by 28 to 64 percent.

Diners

Gifts are also considered important by Ida Laksmi Shanty, director of PT Diners Club Indonesia, the sole franchisee of Diners Club International, Amex's competitor.

"Gift giving is probably the only way to compete in this business," said Ida. "Therefore, it is common that one issuer's creative idea in gift giving is soon copied by other issuers."

Like Amex, Diners also offers rewards to its faithful members. The rules are the same. Members get one point for every Rp 2,500 they spend. But unlike Amex, which offers lifestyle rewards, Diners also gives things like pens. The gifts are provided for both Diners' charge card holders and credit card members.

Diners also cooperates with airlines grouped in the Passages program. The cooperation permits Diners 90,000 members, both charge and credit card holders, access to free tickets.

Pens or glass sets are available so "those whose monthly average spending is around Rp 100,000 ($44.05), still can at least get a pen for a souvenir," Ida said, adding that many housewives are also interested in accumulating the points to win household appliances like a refrigerator or an oven.

To compete, Diners also organizes an installment payment program which enables its members to purchase certain products on credit. Members can pay the purchase in three installments without having to pay interest.

Good service is Diners' emphasis, insists Ida, adding that Diners focuses on serving businesspeople who frequently travel and entertain.

Therefore members who travel can use Diners' special airport lounge facilities which are available in many international airports, except, unfortunately, Indonesia. The purchase and delivery of tickets is all made simple.

Travel insurance is also available. The scheme includes medical care, the transportation of a body back to the country of origin and a ticket for an accompanying person.

Diners Club Indonesia began a birthday program. Members receive cards on their birthdays, complete with a list of restaurants or hotels which offer special discounts for people celebrating a birthday.

"The response last year was very good. I even received a letter from a tycoon who expressed his gratefulness for the program," said Ida. She added that this year the program has not run quite as well because of the change in Diners' management.

"But next year, everything will run as usual," she promised.

Citibank

Enny Hardjanto, the marketing and service director for Citibank Card Products, said that Citibank's best service is basically what the bank offers to its MasterCard and Visa holders.

"Citibank has a 24-hour customer service which serves all customers wherever they are," Enny told the Post.

Therefore, she said, it's not Citibank's policy to attract new card members with gifts. However, those whose applications for MasterCard or Visa are accepted before April next year will be able to buy a pair of watches for Rp 85,000.

Members are also entitled to a gift program called Home Sweet Home if they introduce Visa or MasterCard to their friends. For every application accepted, members get one point. The points can be accumulated and exchanged later with gifts which include electronics, furniture and sports equipment. The points can also be exchanged for money.

"If you're not lazy and have a little spirit, it's easy to accumulate the points," insisted Lisa, an employee of a multinational company in Central Jakarta, who received an alarm clock radio for introducing one of her friends early this year.

Citibank's card members, about 500,000 in Indonesia, also have access to 90,000 banking machines around the world. (als)