Kohl's Takes a Closed-Loop Approach to Store-Branded Mobile Wallets

Kohl's department stores have joined the mobile wallet movement, offering customers the option to link their closed-loop Kohl's Charge cards to the company's mobile app to make mobile payments and redeem rewards.

Kohl's Pay allows more than 25 million active Kohl's cardholders nationally to pay for in-store purchases through their mobile phone while also applying any Kohl's offers, Kohl's Cash and Yes2You Rewards at checkout.

In that manner, Kohl's is bringing a consumer mobile experience with reward redemption at the point of sale that other wallet developers have struggled to incorporate the past few years. For the most part, individual retailers are finding ways to make that technology work in closed-loop formats, such as Walmart Pay including its Savings Catcher feature as part of the app.

Kohl's was an early supporter of Apple Pay in 2015, and earlier this year added the capability of earning Kohl's rewards when customers used their Kohl's card through the Apple Pay wallet.

Menomonee Falls, Wis.-based Kohl's, which operates more than 1,100 stores in 49 states, says it timed the launch of Kohl's Pay to precede the busy holiday shopping season.

“Kohl’s Pay truly redefines convenience for our loyal Kohl’s Charge customers by simplifying the checkout and payment experience, making it easier than ever to shop in store this holiday season,” Ratnakar Lavu, Kohl’s chief technology officer, said in an Oct. 5 press release.

Each Kohl's Pay transaction is remembered on the customer's mobile device, allowing for returns or exchanges from the Kohl's app on iOS or Android handsets.

Kohl's mobile payment app comes at a time when other large retailers are experimenting with ways to handle mobile commerce with their customers.

A customer using Kohl's Pay would launch the app and select Kohl's Pay from the menu options to bring up the Kohl's Pay QR code reader on the phone. When a QR code appears on the customer display at the point of sale, the customer scans the code with the mobile device to apply any savings from Kohl's offers or Kohl's Cash, which is issued to customers based on amounts previously spent.

Prior to adding Kohl's Pay, the company says the Kohl’s mobile app already had more than 14 million downloads, with a key feature being the option to scan and store Kohl’s gift cards, Kohl’s Cash and savings offers.

The app also offers Store Tools, providing a more customized in-store shopping experience, Kohl's said.