Forget "free" checking. Scores of small banks nationwide will offer free gas next week to consumers with no strings attached.
More than 40 financial institutions will offer free gas in 20 major cities for two days starting Aug. 15 in a campaign called "gas stations takeover."
The promotion involves community banks and credit unions that offer deposit products through Kasasa, which is owned by consulting firm BancVue. The free deposit accounts offer perks such as an above-market interest rate, cash back or rewards for iTunes and Amazon.com.
"As a community bank, we've been involved in every kind of town fundraiser but a gas station takeover …is outside the box," says Carlie Olson, the chief financial officer at Pioneer Bank in Mapleton, Minn. "It gives us the opportunity to showcase [the deposit accounts] while giving back to the community."
Pioneer and other banks and credit unions will offer $20 of free gas per person to the first 200 people at a given gas station — until they dole out $4,000 at the station. Patrons are not required to open an account to get gas. Atlanta, Dallas, Chicago, New York and Washington are among the 20 cities targeted with the promotion.
"Gas is a metaphor for giving something back when you don't expect it," says Gabe Krajicek, BancVue's chief executive. "We want people to anchor in their brain that Kasasa gives you unexpected benefits."
This is the first time Kasasa has conducted a nationwide "takeover" campaign, though it has held smaller events with individual banks at bowling alleys and gas stations. BancVue is covering the entire cost of the campaign, including $80,000 worth of gas, public relations and police at each station. Community bankers say that they would not have been able to afford such a large marketing campaign on their own.
"It's the first time we've participated with Kasasa on such large level to get the word out," says Angela Pierson, the business development officer at Jeff Davis Bank & Trust in Jennings, La. The bank is participating Aug. 15 in Lake Charles, La. "We're really excited," Pierson says. "This is huge event."
There were more than 300,000 Kasasa depositors generating $56 million in non-interest income to participating banks by mid-July, according to BancVue.
Pierson and Olson agree that one of their most-popular deposit accounts among the Kasasa products is the high interest rate account. The rates are typically 2.5%-4%. All of the Kasasa accounts have no minimum balance requirement and offers nationwide fee refunds for automated teller machines. It has certain requirements including paperless statements. Bankers say this generates greater efficiencies so they can pay higher rates.
It is "profitable because the behaviors encouraged through Kasasa are behaviors to save the bank money and we're passing that savings back onto the customer," Olson says. "They're profitable from a tangible cost standpoint and then there are ancillary benefits of having new customers."