Bank of America will begin testing a new type of deals program designed to build on its customers spending habits on Tuesday.
The bank will start offering "BankAmeriDeals" to its employees in Nevada, North and South Carolina this week. By mid-February, all of the bank's U.S.-based employees will be able to access the deals.
Based in Charlotte, N.C., Bank of America has roughly 275,000 employees.
The program works by assessing a customer's spending. For example, if a Bank of America customer uses her credit or debit card at a sporting goods store, she might receive an offer for a discount at that store _ or a rival in the same niche _ the next time she logs in to online banking.
To activate a deal, the customer would simply click to accept it. No up-front payments or coupon printing is required.
The next time she uses her card, the value of the discount gets recorded _ say $30, if the deal was for 15 percent off the purchase price, and she spent $200. Once a month, the customer will get a cash-back reward equal to the lump-sum of all the discounts she has used. There's no cap on the amount of cash back a customer could receive.
There will be a way to opt out of the deal offers, said David Godsman, an executive with Bank of America's online and mobile banking division. But he said the program is designed to make more relevant offers available to customers than daily deal email blasts or other coupon programs. Most customers will receive about 16 to 20 offers per month, although someone who uses the deals frequently could see more.
The program is built upon software from an Atlanta-based company called Cardlytics. The company did not immediately return a call, but its website says it handles rewards programs for four of the top 10 banks and three of the top five prepaid card providers.
The program is paid for by the merchants making the discount offers, not by Bank of America. Chase, Regions Bank and others are offering similar types of discount programs.
Merchant-funded rewards programs are filling the space left by the elimination of debit card rewards programs, which have declined in the past year and a half as regulations limited the fees banks collected.
Banks see such offers as a way to build loyalty. The idea is that a customer will use the card linked to the deals she likes more often.
Godsman said there is no timetable for when the program will be rolled out to all of its customers. "This is a test and learn," he said. The bank will be looking for feedback from employees on how they use the program, and will assess the redemption rate and acceptance of the program before opening it up to a broader customer base.