Credit Card Reward Redemption Survey

Member Research
Credit Card
Reward Redemption Survey
June 13, 2016
Background, Objectives, & Methodology
Detailed Findings
Appendix
Background,Objec1ves&Methodology
Background&Objec1ves
OnJune20Costcowillnolongerbeaccep6ngAmericanExpresscardsandwillstartaccep6ngVisacreditcards.Current
CostcoAmexcardholderswillautoma6callybeissuedaCostcoAnywhereVisaCardbyCi6asareplacement.Whilethe
newcardoffersaBrac6vebenefits,therewards,intheformofavoucherthatcanberedeemedforcashorCostco
merchandise,willbeissuedonlyonceayearinFebruaryfortheprioryear’srewards.Thesevoucherscanonlybe
redeemedin-personataCostcowarehouseoutlet.
NavyFederalwasinterestedinunderstandinghowmembersfeelaboutthepoten6allylongwaittoreceiverewards(cash
backearnedinJanuary2017won’tbeawardedfor13months)anduseofavoucherratherthandirectdeposittoa
checkingorsavingsaccount.
Specificareasofinquiryincluded:
§  Wouldmembersratherreceivecashrewardsdepositeddirectlyintotheiraccountorhaveavoucherthatneedsto
beredeemedataspecificretailer?
§  Wouldtheypreferreceivingtheirrewardsonceayearorastheywereearned?
Methodology
•  10-minuteonlinesurvey
•  Fielddates:May31-June7,2016
•  Samplesize:1,204NavyFederalmembersaged18andoverwhohaveamajorcreditordebitcard.
–  Respondentsweredrawnfromlistsofmemberswholivewithina15-mileradiusofaCostcowarehousestore.
2
Background, Objectives, & Methodology
Detailed Findings
Appendix
DetailedFindings
─RewardsRedemp1on─
3
Background, Objectives, & Methodology
Detailed Findings
Appendix
TypeofRewardsPreferred
› 
Respondentswouldoverwhelminglyprefertoreceivecashrewardsfromacreditcardthatearnsrewards.
Cash
MostPreferred
Reward
(Ranked#1)
61%
Travelrewards
18%
Gidcardsthatcanbeusedanywhere
14%
Merchandise
3%
Gidcardsforaspecificretailer
3%
Merchandisefromaspecificretailer
2%
Q:Whetherornotyoucurrentlyhaveacreditcardthatearnsrewards,whattypeofrewardsdo/wouldyouprefer?
Base:Totalrespondents.(n=1204)
4
Detailed Findings
Background, Objectives, & Methodology
Appendix
PreferredMethodforRewardRedemp1on
› 
› 
Easeofredemp6onforcashrewardswasparamountformostmembers.
Almostnoonepreferredreceivingavoucherredeemableataretailstore.
PreferredRedemp1onMethodfor
CashRewards
Voucherthat
needstobe
redeemedata
retailstore1%
VisagiLcard
sentinthemail
18%
Directdepositto
checkingor
savingsaccount
81%
Q:Howdo/wouldyouprefertoreceivecashrewards?
Base:Totalrespondents.(n=1204)
5
Detailed Findings
Background, Objectives, & Methodology
Appendix
DesiredFrequencyforReceivingCreditCardRewards
› 
› 
Desiredfrequencyforreceivingcreditcardrewardsvariedamongrespondents.
Whatisclearisthatfewpeoplewouldbesa6sfiedwiththeprospectofreceivingrewardsonlyonceayear.
FrequencyforReceivingRewards
38%
29%
23%
11%
Atmyrequest
Monthly
Astheyareearned
Yearly
Q:Howfrequentlydo/wouldyoupreferreceivingyourcreditcardrewards?
Base:Totalrespondents.(n=1204)
6
Background, Objectives, & Methodology
Detailed Findings
Appendix
DetailedFindings
─ImportanceofNetwork─
7
Detailed Findings
Background, Objectives, & Methodology
Appendix
ImportanceofCreditCardNetwork
CurrentVisacardholderswereaskedwhethertheywouldwanttheirnextcreditcardtobeanotherVisacardoronefroma
differentnetwork.
› 
› 
Slightlymorethanhalffeltthenetworkdidn’tmaBer.
Onlyone-in-tenwouldwanttheirnextcardtobefromadifferentnetwork.
WhetherorNotNextCardWouldBea
VisaCard
TheseVisacardholderssaytheyare
“comfortablewiththe[Visa]productand
services,”likethatthecardisaccepted
“everywhere”andthatit’sjustwhattheyare
usedto.
Thosewhodon’tcarewhichnetworktheirnext
generallylookingformore“op6ons”especiallyincasetheirVisacardisnotacceptedbya
cardisfromgenerallyfallintotwogroups:
•  ThosewhoseenodifferencebetweenVisaand
merchant.
MasterCard.
•  Otherswhofeelthatinterestrateand/or
rewardsaremoreimportantintheirchoiceofa
cardthanthenetworkitisaffiliatedwith.
“Visa,MasterCard–what’sthedifference?”
“I’mgoingtolookforthebestdealforme.”
“Itisirrelevanttome…MasterCardorVisa.Itis
moreabouttheprogramandinterestrate
associatedwiththecard.”
Generallylookingformore“op6ons”especially
incasetheirVisacardisnotacceptedbya
merchant.
Q:IfyouweretoapplyforanothercreditcardwouldyouwantittobeaVisacardoracreditcardfromadifferentnetwork?
Base:Visacreditcardholders.(n=808)
8
Detailed Findings
Background, Objectives, & Methodology
Appendix
Op1malNumberofCreditCards
› 
Memberswereaskedhowmanycreditcardstheythoughtpeopleshouldown.
› 
› 
Averagenumberwas2.6
Thisissimilartotheactualnumberowned.
None
Op1mum
Numberof
Numberof CreditCards
CreditCards
Owned
2%
7%
1
15%
21%
2
40%
24%
3
25%
17%
4
9%
13%
5ormore
9%
19%
Mean
2.6
2.5
Q:Regardlessofwhichnetworktheyarefrom(Visa,MasterCard,AmericanExpress,etc.),howmanycreditcardsdoyoufeelistheop6mumnumberpeopleshouldown?
Q.Intotal,howmanycreditcardsdoyoupersonallyown?(Creditcards–allowsyoutocarryabalancefrommonthtomonth)
Base:Totalrespondents(n=1204)
9
Background, Objectives, & Methodology
Detailed Findings
Appendix
DetailedFindings
─Costco─
10
Background, Objectives, & Methodology
Detailed Findings
Appendix
CostcoPaymentMethods
› 
› 
Costcoshoppersgenerallyusethesameformofpaymentevery6metheyshopatthewarehousestore.
WiththechangefromAmextoVisacomingthismonth,manyoftheCostcoshopperssurveyedan6cipatechangingtheir
methodofpayment.
› 
› 
Thebiggestchangewillbeanincreaseintheuseofcreditcardsfromlessthanhalftoovertwo-thirdsofmembers.
AlthoughCostcoAmexcardholdersarebeingswitchedtoCostcoVisacards,significantlyfewerplantousethenew
CostcoVisacardthenusedtheirCostcoAmexcardwhenshoppingatCostco.
Debitcard
CurrentlyPay CurrentlyPay ExpecttoPay
(allmethods) MostOLen (allmethods)
49%
44%
42%
Totalcreditcard
44%
40%
70%↑
CostcoAmex/Visacard
29%
26%
22%↓
OtherAmex/Visacard
16%
14%
55%↑
Cash
23%
8%
18%↓
Check
13%
8%
10%
CostcoCashcard
1%
-
1%
Q:WhenyoushopataCostcowarehousestore,howdoyoupayforyourpurchases?
Q.Howdoyoupaymostoden?
Q.HowdoyouexpecttopayforyourpurchasesatCostcobeginningJune20?
↑↓Significantlyhigher/lowerthanCurrentlyPay(allmethods)95%confidencelevel
Base:PastthreemonthCostcoshoppers(n=531)
Background, Objectives, & Methodology
Detailed Findings
Appendix
Appendix
─ProfileofRespondents─
12
Background, Objectives, & Methodology
Appendix
Detailed Findings
RespondentProfile
CardOwnership
Averagenumberofcreditcardsowned
2.5
Averagenumberofdebitcardsowned
2.1
AnyVisacreditcard
67%
Anydebitcard
59%
CostcoAmericanExpresscard
Male
Base:Totalrespondents(n=1204)
44%
7%
Age
Gender
Female
ShoppedatCostcopast3months
18-34
33%
63%
35-54
4%
38%
55-64
29%
65andover
29%
13
Background, Objectives, & Methodology
Detailed Findings
Appendix
TechnicalAppendix
14
Background, Objectives, & Methodology
Appendix
Detailed Findings
SampleReliability
FindingsbasedonasampleofNavyFederalmembersaresubjecttosomeerror.Thefollowingtableshowstheapproximate
samplingtolerancesforvariouspercentageresultsatthe95percentconfidencelevel.Forexample,ifweconsideraresultof
60percentbasedonthetotalsampleofmembers(N=XXXX),wecanbe95percentsurethatthetrueresultiswithinthe
rangeofthreepercentagepointsaboveorbelowthesampleresult(thatis,withintherangeof57%to63%).Thepossible
samplingerrorisgreaterwhenevalua6ngpercentageresultsforsubgroupsofthetotalsample.
ApproximateSamplingTolerancesforSurveyPercentageatorNearTheseLevels
SampleSize 10%or90% 20%or80% 30%or70% 40%or60%
50%
1,000
2
2½
3
3
3
800
2
3
3
3½
3½
500
2½
3½
4
4½
4½
300
3½
4½
5
5½
5½
200
4
5½
6½
7
7
100
6
8
9
9½
10
50
8
11
12½
13½
14
15
Background, Objectives, & Methodology
Appendix
Detailed Findings
SampleComparisons
Asta6s6caldifferencebetweengroupswithinanyonesamplemustalsobeaminimumsizetobesignificant.Thetablebelow
isaguidetotheapplicablesamplingtoleranceswhencomparingresultsforsubgroupsofthetotalsample.
•  Forexample,intwoseparatesamplesof500,ifanobservedpercentagedifferenceis6ormorepointsatthe50%results
area,thechancesare95in100thatitisatruedifferenceandnotduetochancealone.
• 
Intwoseparatesamplesofunequalsizes,e.g.,500and100,apercentagedifferenceof11pointsormoreatthe50%
resultsareawouldhavetoobservedbeforewecouldbe95%certainthatthedifferenceistrueandnotduetochance
alone.
DifferencesRequiredforSignificanceatorNearThesePercentageLevels
SizeofSamples
Compared
1,000and1,000
750
500
100
10%or90%
3
3
3
6
500and500
300
200
100
4
4
6
6
300and300
200
100
50
200and200
100
50
5
5
7
9
6
7
9
20%or80%
4
4
4
8
5
6
7
9
6
7
9
12
8
10
12
30%or70%
4
4
5
9
40%or60%
4
5
5
10
50%
4
5
5
10
6
7
8
10
6
7
8
11
6
7
8
11
7
8
10
14
9
11
14
8
9
11
15
10
12
15
8
9
11
15
10
12
15
16