American Express Co. has launched a benefit that enables its cardholders to use Membership Rewards points to pay for all or part of their purchases on Amazon.com, the company announced Sept. 13.
Under the AmEx program, 1,000 Membership Reward points equals $7, or about 143 points per dollar.
The Amazon deal is an extension of AmEx’s Pay With Points feature launched in 2005 that introduced the ability for cardmembers to use points toward travel purchases such as hotel and airline tickets and toward tickets bought from TicketMaster.
“We’re always looking for ways to enhance our Membership Rewards program, and we’ve seen over the past few years that our Pay with Points program with travel has been extremely popular and one of the most popular redemption options, as well as the points redemption we have with TicketMaster,” an AmEx spokesperson says. Cardmembers like to shop at Amazon, so it made sense to pursue that benefit in the retail space, she says.
Cardmembers must link their Membership Rewards account with their account on Amazon.com by following instructions on the Amazon site.
The ability to use points in conjunction with one of the world’s biggest online retailers is significant, analysts say.
“It’s a big deal,” says Megan Bramlette, a director at Auriemma Consulting Group, who is tracking the changes issuers are making in catering to their rewards customers to keep them happy and loyal to their cards.
Moreover, such a service provides greater flexibility for rewards members, notes Adil Moussa, an analyst at Aite Group,
“Consumers will feel they can get much more value from their points because it allows them to use points however they see fit. It’s no longer choosing items from a catalog or online mall,” he says. “This is pretty much open choice for the consumer, and it’s a significant step forward” and a differentiator between AmEx Membership Rewards and other programs.
Keeping customers happy also is key, Moussa says. “Retention is going to be good once you offer consumers what they want,” he says.
Amazon.com may have struck the deal with AmEx this fall, but it already has a cobranded rewards card program with JPMorgan Chase & Co. that at this point does not allow cardholders to use points directly for merchandise purchases on Amazon.
But Chase says its Amazon Visa card is the only card that always delivers unlimited three times the points for spending on Amazon.com, according to a spokesperson in an e-mail statement.
“Also, the Amazon Visa card’s points provide full value of a point, where 2,500 points enables a $25 gift card,” she says. (AmEx cardholders would need 3,571 points to earn $25 in Amazon value). “The Amazon Visa card provides many rewards options, including Amazon gift cards, cash back and travel all at full value of points.”
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