ANZ launches new cashback programme

ANZ is offering a new type of rewards programme for customers, but one marketing expert says shoppers should make sure it works for them.

Through ANZ Loop, ANZ customers will earn cash back automatically on eligible purchases from shops such as The Warehouse, Designer Wardrobe, New Balance and Noel Leeming when they pay using their Visa Debit or credit card.

Grant Knuckey, ANZ NZ managing director for personal banking, said ANZ Loop responded to customer demand for banking products that were simple to use and relevant to them.

"Rewards schemes have proven popular with Kiwis and this is a way we can deliver cashback offers straight to our ANZ customers. The same offers are presented to Visa Debit card holders as well as credit, meaning a much larger group of customers benefit from ANZ Loop."

Customers can check their ANZ goMoney app to browse their available offers, and get a notification when cash is on its way to their account.

The amount of cashback available will vary. Noel Leeming is offering $50 cashback on spending above $500, while New Balance is providing 5 percent cashback on all online purchases.

The offers will be available in ANZ Visa customers' goMoney app.

Transactions must go through the Visa network to be eligible, so when paying in store with a debit card, customers will need to tap and make a contactless payment.

Rewards will usually be paid within two to seven days, directly into the card account the transaction was originally made from. ANZ Loop cashback offers are in addition to any other credit card rewards a customer may already earn.

Marketing expert Bodo Lang said he was not surprised to see innovation in the loyalty market and this was a significant evolution in New Zealand.

"There is space for new loyalty programmes for several reasons. First, the demise of Fly Buys, a significant and well-known loyalty programme, has created space for a new competitor to enter the market. Second, banking products and banks themselves are largely undifferentiated.

"Apart from branding and clear colour associations, banks lack strong functional or emotional differentiation. Therefore, innovation in the loyalty programme market allows ANZ to capture consumers' attention with this new programme."

He said it was convenient and simple, and would offer fairly immediate and visible rewards.

"Consumers will see these in their banking app, and they will stand out because the 'credit' column in most bank accounts has few entries. The fact that ANZ Loop is 'stackable' is also important.

"If ANZ had removed its existing loyalty programme and offered ANZ Loop instead, there would likely have been some consumer backlash. However, this appears to be a benefit on top of a benefit. Most consumers are likely to respond positively to this.

"Another advantage is that the programme is available not just for credit cards but also for debit cards."

But he said, as with any promotional tactic, there was a risk that consumers would spend too much to reach a reward.

"Some, for example those with a gambling addiction, may be particularly prone to this. Second, ANZ Loop will create personalised offers. It can only do this if it differentiates between groups of customers or is able to tailor offers to individual customers.

"So, customer data will be used in one way or another to shape these personalised cashback offers. Some consumers will not be aware of this and may find it objectionable.

"Third, more broadly, the programme will make the marketplace less transparent. What one consumer pays for a product may not be the same as what someone else pays at the same time for the same product. This is relatively unusual in retailing, but of course common in other industries. This makes price comparisons more difficult and increases stickiness; some consumers will be more likely to use ANZ Loop and restrict their shopping to certain retailers.

"That is, after all, the ultimate aim of these programmes: to shift sales and profits."

He said while customers were used to points-based loyalty programmes and having cashback, an offer at this scale would be new for New Zealand.

"It may shift market share and spending to ANZ and participating retailers. Second, the programme will leverage the incredible amounts of transactional data that banks, and some retailers, have at their fingertips.

"Essentially, ANZ is hoping to achieve 'top of wallet' status for its cards. Understanding how and when consumers respond to offers, will provide valuable insights for ANZ and its partners."

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