Two of the country’s recognizable brands are using the 2010 International Builders Show (IBS) in Las Vegas to launch a new credit card for small business owners.
American Express OPEN has entered into a strategic partnership with Lowe’s Cos., the second-largest dealer of home improvement products, to offer a Lowe’s Business Rewards Card, which enables users to earn rewards points on every purchase, and rewards their loyalty to Lowe’s.
The new card, which has no annual fee, gives users one reward point for every eligible dollar spent on the card; two points for every dollar spent at one of Lowe’s stores; and three points for every dollar spent on restaurant purchases, office supplies, and wireless expenses.
There is neither a limit on the amount of rewards a user can earn nor an expiration date.
Esra Alev, vice president of cobrands at American Express OPEN, told BUILDER on Wednesday that her company is attracted to Lowe’s as a partner because of its “diverse customer base,” which includes contractors, remodelers and project and property managers. She added that Amex was also looking for a “brand fit” with another company that emphasizes customer service.
At the launch, the card is being offered in 400 of Lowe’s stores and will be in all 1,700 of its stores by the end of March, she said. Alev declined to provide details about the terms of the agreement between her company and the retailer. She would not expound on the marketing strategy beyond saying that it would focus on in-store and direct-mail promotions. (She confirmed that each user's credit line is determined by his or her credit history. User charge rates range from prime plus 9.99% to prime plus 14.99%.)
Card users gain additional benefits, such as automatic enrollment into OPEN Savings, which gives small business owners savings of between 3% and 25% every time they use the card to make purchases at an OPEN Savings partner. (Those savings are credited to the users' accounts.)
The timing of this launch corresponds with a renewed effort by Lowe’s to attract professional and commercial shoppers into its stores and online, which the Mooresville, N.C.-based retailer announced to analysts and investors last September.
Lowe’s generates somewhere around 25% of its sales annually from professional and commercial customers, according to company estimates. How many of those pros are builders is anyone’s guess, but Lowe’s hasn’t minimized the long-range impact on its overall growth from purchases by its professional customers the way its chief rival, The Home Depot, has in recent years. (Indeed, Depot is not exhibiting at IBS this week.)
Larry Stone, Lowe’s president and COO, said in a prepared statement that his company’s Business Rewards Card is one way of “adding value for our commercial customers,” and that the card “offers convenience and rewards at a time when business owners need it the most.”
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Las Vegas, NV.