In marketing coup for Discover Financial Services LLC, Dollar Tree Stores Inc. has agreed to accept cards issued on Discover's network exclusively in about 2,100 of its 3,100 stores across the country. The deal, which takes effect immediately, means the Cheseapeake, Va.-based chain, which is part of a fast-growing retail segment that advertises items for sale at or around $1 each, has become the fourth merchant to agree to accept Discover Network cards exclusively in all or some stores. It also represents a major expansion of card acceptance for the merchant, which up to now has been accepting cards only in about one-third of its stores. Riverwoods, Ill.-based Discover also has agreements with a number of local governments and universities for exclusive acceptance. The agreement with Dollar Tree covers all products issued on the Discover network, including Pulse-branded PIN debit cards. The Houston-based Pulse electronic funds transfer network is a unit of Discover. The Discover network has agreements with a number of prepaid and credit card issuers to distribute cards, including a joint deal with Wal-Mart Stores Inc. and GE Consumer Finance. The approximately 1,000 stores not exclusively accepting Discover products also accept Visa USA and MasterCard Worldwide cards as well as debit cards, a Discover spokeswoman says. Discover would not discuss pricing or other terms of the agreement with Dollar Tree. In addition to Dollar Tree, Discover network cards are accepted exclusively at Sam's Club Warehouse (a unit of Wal-Mart), Dollar General Corp., and KinderCare Learning Centers Inc., a chain of 1,250 preschools. Dollar Tree and Dollar General, which operates 8,000 stores, compete in a retailing segment to which consumers have apparently been flocking in increasing numbers. Dollar Tree, for example, reported sales of almost $3.4 billion last year and a 14% increase in revenue in the first quarter of 2006.
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