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American Express launches its first cross-brand loyalty program in the United States

Published: 03:16 19 Mar 2015 AEDT

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Starting this spring, American Express (NYSE:AXP) cardholders will be able to redeem the points they collect on their cards when filling their cars with gas at Exxon or Mobil service stations, to obtain discounts on a shirt at Macy's or receive an insurance quote at Nationwide.

American Express, or AmEx, has launched its first cross-brand loyalty program in the United States.

"We’re pleased to introduce the first U.S.-based coalition loyalty program, where consumers will have the flexibility and choice across seven well-known brands to earn and use points for purchasing a wide range of products," said AmEx’s CEO of US Loyalty, Abeer Bhatia.

AmEx has teamed up with AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Macy's (NYSE:M), Nationwide, Rite Aid (NYSE:RAD), Direct Energy and Hulu in a program named Plenti. For every 1000 accumulated points, AmEx users will qualify for a US$10 credit.

The US only program will also enable customers to accumulate points by paying their AT&T phone bill or buying medicines in Rite Aid drugstores.

AmEx cited a recent study suggesting that some 72 percent of Americans would prefer to use reward points at many stores or businesses rather than a single brand. The Plenti program is aimed at winning back some consumer and market confidence after American Express faced charges of violating antitrust laws last February.

The news also comes after earlier in the month, AmEx broke its relationship (effective next year) with retail chain Costco Wholesale (NASDAQ:COST), having been unable to agree on renewal terms of their contract.

JPMorgan analyst Tien-tsin Huang said the loss would reduce spending on AmEx cards by about $80 billion a year, including their use at businesses other than Costco's stores. AmEx fears the loss of the contract could reduce earnings over the next two years.

The loss of Costco’s business was significant as it generated some 20 percent of AmEx’s loans and 10 percent of its cards.

AmEx also lost a 10-year long relationship with airline JetBlue Airways in February. The company continues to issue co-branded cards with Delta Airlines, Cathay Pacific and Starwood Hotels & Resorts Worldwide.

AmEx shares were trading at US$80.50 midday on Wednesday, down 0.7 percent.

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