Leumi Card Ltd. is falling into line with competitor credit card companies and has told customers that it is cancelling the points system, which provides offers to its customers. The accumulation of points will continue through the end of 2011, and points will remain valid until the end of 2012. Special offers include cultural events, products, and leisure activities, which can be purchased directly on the Leumi Card website. Leumi Card has notified its cardholders of the decision.
Like its two competitors, Isracard Ltd. and Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), Leumi Card holders will continue to receive incentives to use their credit card. The company has announced that it will soon launch a new benefit program, "that will satisfy all its customers according to their preferences." Customers who prefer to continue receiving offers in frequent flyer clubs, will be able to continue receiving them. ICC-Cal was the first credit card company to cancel its points system in the summer of 2007, and Isracard followed suit in February 2011.
The credit card companies have finally understood, albeit late, that the extremely low correlation between points or stars and use of the credit card meant that the points system was unattractive, unpopular among customers, and sometimes even provoked frustration and a feeling that the company treated them with contempt.
A survey conducted by The Sarid Institute for Research Services Ltd. for "Globes" showed that 80% of customers prefer discounts over offers given through points or stars. Leumi Card's financial report shows why: The cost of each point is between NIS 0.007-0.055. When a customer "buys" something for NIS 250, he receives only NIS 0.055 in points. Only 60-80% of Leumi Card points are utilized.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2011
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