October 2010

Participating merchants accept a portion of their retail prices in frequent flyer miles or other rewards points, such as American Express Membership Rewards. This provides them with incremental sales and profits through cost-effective cross-promotion with rewards program operators, banks and charge card strategic partners.

Rewards programs enhanced by Universal Reward Solutions (URS) offer significant advantages:

• Consumers increase their purchasing power by spending rewards and saving cash. They enjoy more places to spend their rewards and don’t have to save up large numbers of miles or points to redeem them.
• Reward program operators, such as the airlines and American Express, are able to provide the rewards at a low cost relative to the redemption value to the consumer. Operators also gain valuable information on their customers’ buying preferences.
• Merchants cover their marginal costs in cash – plus a cash profit – with customers delivered for free through the DCS network. Electronic card processing, at the point of sale, saves merchants’ time and money over cash, checks, coupons and punch cards.
• Card companies and banks offer exciting new card features, while benefiting from greater transaction volume. They also enjoy more satisfied cardholders and merchant clients.

The Immediate Business Opportunity

"Loyalty" programs are today becoming anything but loyalty builders. As an example, airline passengers in the U.S. alone are holding more than nine trillion frequent-flier miles, 50% more than just 5 years ago. Struggling for their own economic survival, airlines can not allocate additional seats to reduce the glut of unspent miles. Holders of credit and debit cards are also accumulating miles and reward points at a record pace. Meanwhile, the process for redeeming rewards can be cumbersome, with the redemption options often disappointing.

Complete Executive Summary -- Universal Reward Solutions

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