Target takes credit for Visa program
Andrea Lillo -- Home Textiles Today, May 6, 2002
In an attempt to allay analysts' apprehensions about the retailer's increasing reliance on its credit card business, Doug Scovanner, cfo and executive vp, finance, Target, discussed the benefits of the new Target Visa credit card program, which launched in September, at the Lehman Brothers Retail Seminar last week.
One of the fears of credit card programs in general is that credit will be extended to people who won't pay their credit card bills, saddling the sponsoring retailer with debt.
Scovanner, however, pointed out that the new program is a step up from its regular Target credit card, and that, because of its Visa connections, will attract more credit-worthy customers.
Guest card receivables for Target totaled $3 million in 2001, and that number should sharply increase with the addition of the new Visa card program.
Scovanner added that the program will enhance customer loyalty and drive frequency and average ticket sales, as well as have lower costs for account acquisition. The Visa Card also comes equipped with smart chip technology, which is not functional as of yet but will be soon, he added. Within a month, all stores will have chip card readers.
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