American Express Co. disclosed Monday that it will end its multi-merchant Plenti rewards program on July 10.
AmEx announced the closure through a tweet on the Plenti Twitter feed and on Plenti’s Web site. “While Plenti has grown in scale since its launch, a number of factors, including shifting priorities among some partners and changing competitive conditions in their industries, led American Express to determine that its investments in coalition loyalty initiatives will be better suited to international markets where it manages several large and growing programs,” AmEx said in a statement.
AmEx launched Plenti in March 2015 as the first U.S. national consumer-rewards program that enabled points to be earned and used across multiple merchants. The seven inaugural partners were AT&T, ExxonMobil, Macy’s, the Nationwide car-rental agency, Rite Aid, Direct Energy, and Hulu. Others joined later, including restaurant chain Chili’s.
But in the past year merchants such as Macy’s, Chili’s, and AT&T have quit, prompting observers to speculate that Plenti wouldn’t last.
Jordan McKee, principal analyst for payments at New York City-based 451 Research, tells Digital Transactions News that “merchant coalition programs are inherently challenging to build and operate.” Obstacles include designing a program that is attractive to consumers while simultaneously including merchants that don’t compete directly but often have differing business goals, he says by email.
“Reaching consensus on how the program is structured can be a lot like herding cats,” McKee says. “Getting merchants to commit to the program for an extended period of time can also be problematic. If one or several large merchants drop out of the program, it can instantly diminish the value for a large percentage of consumers.”
McKee adds that consumer education is another barrier. “Confusion often results in coalition programs when shoppers don’t fully understand how and where they can earn rewards, limiting adoption,” he says.
AmEx did not disclose how many consumers signed up for Plenti. While AmEx managed the program, consumers did not need to use AmEx cards in order to earn Plenti points that could be redeemed for discounts at the participating merchants, with 1,000 points earning at least $10 in savings. Enrollees received a Plenti card that they could use at the point of sale, but if they didn’t have it on hand they could still earn points by providing their registered phone number and/or a PIN. Users also could earn points online.
Plenti members can still earn points with purchases at ExxonMobil gas stations and Bi-Lo, Fresco y Más, Harveys, and Winn-Dixie supermarkets through July 10. They also can redeem point at those places as well as at Rite Aid drug stores until that date. Users can redeem Plenti points at Macy’s and Chili’s until May 3.
AmEx got into multi-merchant rewards in 2011 when it acquired Loyalty Partner, which managed a program called Payback in Germany, India, Poland, Italy, and Mexico.