JPMorgan Chase & Co.'s new process for spending rewards points directly on Amazon.com replaces an old process that the issuer determined was not all that rewarding.
Amazon.com Visa cardholders now spend points as though they were a credit already on file with the company. This replaces a six-step process to redeem points by ordering a gift card that was mailed to them, Chris Conrad, general manager of Chase Card Services, said in an interview.
Under the old process, a customer would log into JPMorgan Chase's website, choose to redeem rewards, order a mailed certificate, wait several days for the certificate to arrive, and then type the code from the certificate back into their computer to load that balance to their Amazon.com account. Only then could the rewards be spent on a new purchase.
"The rationale [behind the new redemption method] was to make redemption for Amazon purchases as easy as possible, and the best way to do that was to fully integrate the rewards points into the Amazon checkout process," said Conrad. "We're getting rid of a barrier."
The new process adds an option on the checkout page that allows cardholders to pay using all or part of their Amazon card points. Cardholders do not need to wait until they reach a certain threshold — a cardholder with 1,174 points could redeem them for $11.74 off the total amount of a purchase, for example. Previously, there was a $25 minimum to redeem points as a mailed certificate.
JPMorgan Chase plans to begin promoting the service Tuesday by including a header on the Amazon.com home page informing cardholders of the change.
JPMorgan Chase also plans to use direct mail, email and ads on Chase.com and other websites to promote the service, Conrad said.
Making redemptions simpler for cardholders is an important step in keeping cardholders loyal to a rewards program, one analyst said.
"Redeeming points directly from the website is really the way a lot of rewards programs are going to go in the future," Adil Moussa, an analyst at Boston-based Aite Group, said in an interview, adding that convenience is "really the name of the game."
JPMorgan Chase, however, was not the first to apply automatic points redemption on Amazon.com.
Amazon struck a deal with American Express Co. in September that enabled Amex cardholders to redeem Membership Rewards points for purchases. That deal is an extension of Amex's Pay With Points program launched in 2005, which also enables cardholders to use points toward travel purchases and TicketMaster purchases.
