NEW YORK-Cash back, coupons and a potential new CU revenue stream are all part of a merchandise shopping platform being promoted to credit unions by UNFCU Financial Advisors.
The online platform, which can be branded by each credit union, is being positioned as a value-added service, explained Steve Ryerson, president of UNFCU Financial Advisors, a wholly owned CUSO of the $3.7-billion United Nations FCU.
"From a consumer's perspective, we think the platform provides the best of both worlds-coupons and cash back. This brings more value to the member, which builds deeper relationships."
It also brings in additional revenue, noted Ryerson, who said the credit union receives a small portion of the cash back being returned by each merchant to shoppers. While the revenue per-purchase may not be large-pennies on the dollar-where Ryerson thinks CUs will benefit the most is from members using the credit union's plastic when they shop on the platform.
"I am fully convinced there will be a propensity for members to use the credit union's cards," said Ryerson, who added that the credit union cannot mandate members use the CU's cards on the shopping network as merchants would not allow that rule.
Options For Shoppers
Shoppers can choose from more than 5,000 national and local merchants. Each merchandise item on the network shows the cash back being offered, and consumers can sort their shopping based on the largest cash-back offer per item they are looking for. Ryerson said he has seen cash-back deals as high as 40%.
"Most of the national merchants offer about 1.5% to 4% cash back on the purchase price, but the discounts tend to be greater from local merchants."
Once shoppers register on the platform and personalize a home page they can track how much cash back they accumulate and can redeem money in increments of $15, $25, $50 and $100. Money is returned via the member's CU account, PayPal or check.
Cash back can also be directed to charity by the shopper and by the credit union.
Merchant discount coupons are part of the site, and shoppers are made aware by each merchant whenever they are available. "This is not a situation where each merchant is giving a coupon," said Ryerson. "Consumers will just be given access to any coupon deal a merchant is offering."
United Nations FCU plans to introduce the platform to its members in the fourth quarter or early next year. The credit union's CUSO kicked off the offering to other CUs during a webinar in late June. The shopping service, offered free to credit unions, delivers a percentage of each cash back transaction to the New York-based Retail Benefits, which owns the network, and a smaller percentage to UNFCU Financial Advisors.
'Perfect For Young Adults'
Ryerson emphasized that adding value to members' lives does not always come in the form of a financial product or service, and that new ways will emerge in the coming years to deepen relationships and revenue.
"The platform, too, can be an attractive added benefit for an SEG group, and for reaching out to Gens X and Y," he said. "It's perfect for young adults-they are not fans of going to retail stores and prefer online."