Transmedia Network Inc., the discount dining card company, and the Signature Group, which offers credit card enhancements, are upping the ante in the competitive frequent-flier business with two new programs aimed at travelers who dine out often.
Schaumburg, Ill.-based Signature Group is tapping into United Airlines' most profitable customers - those who fly a minimum of 25,000 miles a year and are members of one of the airline's three Premier travel programs.
The United Mileage Plus Dining program allows Premier customers to earn 10 miles for each dollar they spend at 4,200 participating restaurants located in eight domestic United Airlines hubs. There is no annual fee.
Similarly, Miami-based Transmedia Network is offering frequent-flier customers of Continental Airlines and United Airlines 10 miles for every dollar spent at 6,000 restaurants in the United States and abroad. Transmedia charges $9.95 a year for its service.
Unlike the Signature Group, however, Transmedia Network does not have contractual agreements allowing it to market to the airlines' frequent- flier customers.
"We would certainly like to contact United's customers directly, but that didn't happen," said Ronald Kieves, vice president of marketing for Transmedia. Its marketing so far has been limited to advertisements in in- flight magazines.
Industry experts agree that United Mileage Plus Dining and Transmedia's frequent-flier program are generous compared with others that offer customers two and three miles per dollar spent at restaurants.
But, the fact that United Mileage Plus Dining is limited only to Premier customers is a drawback, said Tammi Scheetz of Inside Flyer magazine, who pointed out that other programs are not exclusionary.
"This program is about customer loyalty and rewarding United's best customers," said a spokeswoman for the Signature Group.
Since Transmedia and the Signature Group do not provide billing services, customers are required to register their credit card accounts. The Signature Group allows people to register up to three cards while Transmedia limits its program to one card.
Mr. Kieves sees Transmedia's service as a credit card enhancement and activation tool. "We are diverting restaurant charges to bank cards," he said.
Ms. Scheetz pointed out that savvy consumers will use their frequent- flier bank cards to pay for the charges in the dining programs to earn even more miles.
Transmedia still offers another frequent-flier program it launched last September, Transmedia Dollars, which costs $50 a year and allows cardholders to earn miles on any airline. Transmedia Dollars gives customers a 30% rebate on meals at participating restaurants, but the customer is charged the full bill, while the rebate is held in an escrow account, which can be redeemed when the customer submits a receipt for an airline ticket.