Transmedia Program Links Rebates to Air Fare Discounts

Transmedia Network Inc., the discount dining card company, introduced a program that offers a 30% rebate on meals, which can be applied to the purchase of an airline ticket.

Barry S. Kaplan, president of Transmedia Service Co., called the plan a "vehicle through which you save and fly free."

The company, which claims 500,000 members worldwide, markets its card through partnerships with banks and newspapers. It traditionally offers 25% cash back on meal costs, except tax and tip. The bill is charged through the Transmedia card to the member's credit card of choice. The 25% credit shows up on the same bill.

The new program, Transmedia Dollars, also offers savings to the consumer, but with delayed gratification. The entire meal cost is charged to the credit card, and 30% of that sum gets posted to a Transmedia Dollars account.

Transmedia holds the money until the member buys an airline ticket on any carrier. After the consumer sends proof of purchase to Transmedia, a check is issued for the balance of the account.

Members who switch to the new plan pay a $15 administrative fee, above the $50 membership cost. There also is a $15 fee to switch back and a 30% penalty on the unredeemed cash. Membership cancellation results in a 50% penalty.

While Mr. Kaplan said Transmedia Dollars is a "wonderful deal" for participants, he noted the company "gets the float." Transmedia earns interest on the money it holds, and if customers do not cash in, Transmedia keeps the account.

Mr. Kaplan said Transmedia realized the drawing power of frequent flyer points while designing the new program.

"You can earn a lot more value on our program," he said. "You have to spend $20,000 to get a $300 airline ticket on most programs. With us you spend only $1,000."

G. Randall Munger, chairman and chief executive of Advantex Marketing International Inc., which is launching a discount dining program in Canada modeled on Transmedia's basic program, said he would "rather have my cash back when I spend it."

The extra 5% would not amount to enough of a lure, he said. "You're banking on something in the future - you may take a trip, you may not."

The Advantex Dining card, recently launched in Toronto, has 10,000 members and 200 restaurants, but it could get a big boost from an alliance with Canadian Imperial Bank of Canada. The largest Visa issuer in Canada, with four million cards, will test Advantex on selected AeroGold and Gold Visa cardholders in the Toronto area. If tests are successful, the program will be rolled out to CIBC Gold Visa cardholders throughout the country.

Advantex offers 25% off meals, except tax, tip, and alcohol. Transmedia includes alcoholic beverages in its discount, but charges $50 for membership; Advantex is a no-fee program.

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