Zale Corporation has signed a new, multi-year private label credit card program agreement with Alliance Data Systems Corporation. Through its Comenity Capital Bank (“CCB”) subsidiary, Alliance will provide private label credit cards to customers of Zale in the United States. Following the completion of program implementation during the first half of fiscal 2014, Zale will begin to receive benefit from Alliance Data’s extensive marketing, analytical and technical services. For each of Zale’s U.S. brands, Alliance Data will provide proven marketing and database capabilities, sophisticated analytics and a suite of omnichannel marketing tools designed to generate sales and extend brand affinity. Alliance Data will also provide a portfolio of innovative tablet and mobile marketing solutions for fine jewelry that are designed to optimize cardholder acquisition and retention. In addition, Zale will receive a commencement payment in July 2013 from CCB.
Zale Corporation has implemented the NewComLink retail credit solutions platform as part of its new program to provide alternative financing options to its U.S. customers. Zale announced the new alternative financing program on August 31, 2011, which is currently available in all Zales, Zales Outlet and Gordon’s retail stores. With this development, Zale can connect customers with additional financing options to help complete their jewelry purchases. The NewComLink platform brings new efficiencies to financing and allows retailers to serve additional customers who want to make a purchase, increasing incremental sales, profits and improve customer satisfaction.
Zale Corporation initiated a program to provide alternative financing options for U.S. customers through Monterey Financial Services consumer finance company. Citibank (South Dakota), N.A. (“Citi), remains the company’s primary consumer financing provider in the United States. Zale will offer this program to select customers whose credit applications have been declined by Citi, providing them with an affordable option to finance their merchandise purchases.
Zale Corporation has selected Citibank to provide its private label credit card program. For use at Zales, Zales Outlet and Gordon’s brands in the United States, effective October 1, for a term of five years with automatic renewals for successive two-year terms. This agreement replaces the Company’s agreement with Citi which was scheduled to expire in March 2011. In connection with the agreement, payment of the merchant fee differential, due September 22, 2010, will no longer be required. Under the new agreement, the yearly minimum volume of net credit card sales has been reduced from $600 million to $315 million. Additionally, Citi will provide financial support of the Company’s marketing activities during the initial five-year term of the contract.
NJ-based TD Retail Card Services been selected by Zale Corporation to
administer the private label credit card program for the retailer’s 216
stores in Canada, effective July 1.
Under the five-year agreement, TD will direct all facets of the private label credit card program for
Zale’s 147 Peoples Jewellers stores and 69 Mappins Jewellers locations
across Canada. The program replaces the Company’s existing agreement
with Citi Cards Canada Inc. that expires on June 30. Branded under the Peoples and Mappins names, the cards will offer
Canadian consumers a number of financing options, including
interest-free and no-payment offerings. In addition, the cards can be
used interchangeably between Peoples and Mappins.
The Payments Accountability Council (PAC), led by Retail Council of Canada (RCC), the Canadian Council of Grocery Distributors (CCGD) and backed by more than 250,000 Canadian merchants, applauds Finance Minister Flaherty and the Government of Canada for the announcement of a code of conduct for the Canadian debit and credit markets. Though merchants understand the government’s push for voluntary measures as a first step, the PAC advocated for, and supports the inclusion of powers to regulate the market in light of card company practices seen in other countries around the world. The PAC remains focused on the need to provide clarity; the need to provide merchants with effective tools to manage payment card costs; and the need to ensure that the costs built into the system through loyalty and other programs are paid for by those who introduce and benefit from these costs.
Retail Council of Canada (RCC), The Canadian Council of Grocery
Distributors (CCGD) and the StopStickingItToUs Coalition have commended
Finance Minister Flaherty and the Government of Canada for the
introduction of a Code of Conduct governing the Canadian debit and
credit card markets. The Code is designed to ensure merchant choice,
enhanced competition and greater transparency in a marketplace dominated
by only a few large companies. In response, the RCC, CCGD and its
Coalition partners have established the Payments Accountability Council
(PAC) to provide input to the consultation process and report on
compliance with the Code. The Code allows merchants to choose the least
expensive method for processing on each transaction and to have complete
choice on which credit and/or debit products to, or not to, offer.
Rahaxi Processing has signed agreements with the Kultajousi jeweller
chain to supply its OTI solution. Rahaxi Processing will provide more
than 60 of the Kultajousi stores in 27 different cities in Finland with
its services. Rahaxi provides mission-critical solutions to the
financial industry worldwide. Working with merchants and acquirers in
more than twenty countries, it has adopted a partnership strategy for
growth while its subsidiaries, including Rahaxi Processing, FreeStar
Technologies Ireland and FreeStar Dominicana Dominican Republic,
continue to develop and implement first class products and solutions
that enhance the service level its partners can offer their customers.
The StopStickingItToUs Coalition, representing over 250,000 Canadian
merchant businesses, is commending the Standing Senate Committee on
Banking, Trade and Commerce for its report recommending fundamental
changes to Canadian card issuers and processor operations, namely the
fees and rates charged to merchants and consumers. Recommendations for
credit processing include the appointment of an “oversight board” within
with a mandate to make recommendations; to establish a code of conduct
for payments systems participants and setting fees; to prohibit any
“honour all cards” rules; and to permit surcharging and/or discounting
by merchants. Meanwhile, recommendations for debit card processing
include the calculation of switch and interchange fees on a flat fee;
an interchange fee of zero for 3 years; no percentage fees; to prohibit
priority routing; and to promote the efficiency and competitiveness of
payment systems across the country.
The representatives of Canadian businesses will descend on Ottawa for
the start of House of Commons joint House Finance/Industry Committee
inquiry focused on the fees merchants are forced
to pay to accept credit cards. At the centre of the inquiry are the fee
practices of Canada’s two major
credit card companies, Visa and MasterCard, who have hiked merchant
charges over the past year. Merchants have asked Parliament to examine
the uncontrolled escalation in credit card fees as well as the imminent
destruction of Canada’s low-cost and efficient debit system as Visa and
MasterCard prepare to enter the Canadian market with their own debit
products. Merchants have also been alarmed by the explosion of premium
cards into the Canadian market – cards that carry an increased cost for
merchants. In year’s past these more expensive cards would typically
represent a small percentage of a merchant’s credit card transactions,
but they’ve jumped to more than 30% for many merchants in less than a
year. The hearings signal the first time that credit and debit card
issues have been examined by Parliament.
StopStickingItToUs Coalition and the President and CEO of Retail Council
of Canada has commended the Competition Bureau for investigating Visa
and MasterCard under the “abuse of dominance” rules of the Canadian
Competition Act. The public
announcement of the investigation came at the opening session of Senate
Banking Committee hearings that will “study the credit and debit card
systems in Canada and their relative rates and fees, in particular for
businesses and consumers”.
The “Stop Sticking It To Us” Coalition,
representing over 200,000 Canadian businesses, small, mid and large, is
gathering in Ottawa this week to combat overcharging by VISA and MasterCard.
In the past year, skyrocketing credit card fees and VISA/MasterCard
domination of the debit card business have emerged as major issues in the
United States, Australia and the U.K. The U.S.-based credit card companies have been pushing worldwide to take
over the debit card business and increase service charges on credit card
transactions. In the United States, for example, Visa and MasterCard now
control over 75% of the debit card market. U.S. merchants and customers pay
heavily for the card company’s dominance of that market. A large
retailer with stores in the U.S. reports it pays 70 cents on an average U.S.
transaction. In contrast, the smallest retailer in RCC’s Canadian program pays 7 cents – a
differential of 900%.