Consumers who shop at Oshman's Sporting Goods and Pier One Imports stores in San Francisco, Dallas, and Minneapolis will be able to get up to 20% off at the cash register - if they pay with MasterCard.
The Purchase, N.Y.-based association is running a promotion through Oct. 20 under its MasterValues umbrella. Cardholders who spend $50 or more on their first visit are eligible for 10% discounts under the Electronic MasterValues plan. Discounts escalate to 15% and 20% on subsequent visits.
MasterCard called the three-month pilot "the next generation of retail promotions," and part of its commitment to "leverage technology to provide consumers greater value and convenience."
Anne M. Moore, president of Synergistics Research Corp. in Atlanta, said consumers become frustrated when they encounter problems redeeming rewards and discounts. MasterCard's promotion is "simple to understand and to take advantage of," she said.
"Any feature or system that overcomes redemption procedure problems will help increase usage of the card," Ms. Moore added. "A discount at the point of sale will get the consumer to pull MasterCard out of their wallet rather than Visa, American Express, or Discover."
MasterCard says this kind of point of purchase discount is a first in the payments industry. MasterCard is sharing the cost of the discount with the two retailers, plus paying for print, radio, and television advertising to support it.
Harmonics Inc., Minneapolis, developed the point of sale systems for the pilot.
A second, larger test is planned for March. MasterCard said it is trying to gauge card use and the effectiveness of this type of electronic loyalty program before it expands it nationally.