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It’s the holiday season!

It’s the holiday season!
Posted: Sep 28, 2017
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Is your credit union prepared to capitalize on increases in member spending?

Back to School is over, Fall and pumpkin spice are in the air, and your members are already thinking about holiday purchases, and it’s only the end of September.  If you have a co-worker who has marked the employee break room calendar with a countdown of the number of paychecks left before the holidays, now is the time for your credit union to create holiday credit and debit usage campaigns to compete for transactions, and capture the projected increase in holiday spending this year.

According to the ICSC (International Council of Shopping Centers), Holiday Shopping Intentions Survey, nearly one third of holiday shopping started as early as August. Survey results indicate consumers will spend an average of $728 on gifts this holiday shopping season, with Millennials playing a major role in retail success by spending $554 using their debit cards or cash.

Consumer confidence in economy will stimulate increased holiday spending 

Additionally, Consultancy Deloitte is forecasting retail sales will increase 4% - 4.5% from November to January, resulting in $1.04T-$1.05T in increased revenue, siting confidence in the economy as a key driver for retail sales growth.  Online sales will drive growth with a forecasted spike of 18%-21% totaling $111B-$114B.  This is all good news considering recent store closures by Sears and Macy’s, along with the recently announced Toys R Us Bankruptcy announcement. (Source USA Today).

Thanksgiving is weeks away, but Best Buy, Walmart and Target and other online retailers, have Cyber Monday webpages published so shoppers can sign up now to receive Cyber Monday deals sent to them by email.  Consumers are researching, planning and making their 2017 Holiday spend lists now, and your credit union needs to be ready, whether you plan to offer a special rewards promotion or simply hope for organic sales growth in your debit and credit portfolios.

Important dates for CU's to be prepared to communicate usage messages:

Black Friday – November 24, 2017

Cyber Monday – November 27, 2017

Green Monday – December 11, 2017

Free Shipping Day- December 15, 2017

Super Saturday -  December 23, 2017

Now is the time for issuers to review authorization approval rates with their processor to ensure they are approving the highest number of transactions as possible and to review daily spend limit parameters that may need to be increased during the holiday shopping season to meet cardholder transaction demand.

Card programs help keep the season bright for members

Factors that may hamper holiday sales volume for issuers include inadequate credit lines.  Issuers who have not provided a credit line increase program, CLIP, to their credit cardholders, need to consider and implement a CLIP as soon as possible to gain the projected increased holiday spend, or run the risk of being second in the wallet when their members open another credit line with a new issuer. Many issuers have not offered a CLIP since the Card Act requirement Proof of Ability to Pay language was implemented, but issuers can and should offer a CLIP to their credit worthy cardholders annually.

Also, with the recent Equifax Cyber Breach, issuers need to continue strong fraud monitoring and account security messages to their cardholders to create confidence in card product usage, while also communicating to cardholders effective cash to card spend strategies.  According to last year’s Federal Reserve Bank of San Francisco State of Cash Report, cash continues to generate the largest number of transactions. 

Lastly, Q4 is an excellent time for new cardholder acquisition. Plan to prepare and train member facing staff to offer and promote your credit union credit and debit card products to new and existing members.

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Stephanie  Hainje

Stephanie HainjeStephanie Hainje

Trellance Senior Portfolio Consultant Stephanie Hainje is an experienced card industry professional with credit and debit card program management from her previous career at Purdue Federal Credit Union, a leading affinity credit card issuer and top 100 Visa USA issuer.

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