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Target tests new loyalty program giving 1% cashback

The Redcard has company.

What's happening?

Move over Redcard, there's a new loyalty program in Target town.

The Bullseye confirmed on Monday what had initially been reported at the weekend – it's testing a new rewards program called Target Red.

Twin Cities shoppers will have to wait a while to try it out though – it's being piloted in the Dallas-Fort Worth area next month.

Tell me more

Unlike the Redcard, you don't need to sign up for a credit or debit card to get the benefits of Target Red.

However, the Redcard will still be king when it comes to cashback with its 5 percent offer – with Target Red offering just 1 percent.

Users will be able to enroll in Target Red through Target's app, and gain access to the following benefits:

– 1 percent back on every purchase that can be redeemed at a later trip (so, not at the register, like the Redcard).

– 50 percent off their first-year membership with Target's new same-day delivery partner, Shipt – which currently charged $99 a year or $14 a month for membership.

– Free next day delivery on essentials through its Restock department.

– A chance to vote for one of three local organizations for whom Target will direct its charitable giving.

Target Redcard holders will also sign up to Target Red not be able to "stack" the 1 percent cashback on top of the 5 percent they already get.

They will however be able to access the other benefits.

Why is it doing this?

The Star Tribune, in its report at the weekend, said Target's Redcard membership numbers have plateaued, with nearly a quarter of purchases from its stores and online made with one.

Now Target is looking for new ways to attract loyal shoppers – hence Target Red, which puts the onus on ease and convenience.

"When developing Target Red, we went straight to our guests to better understand what would be most meaningful to them in a loyalty program,” said Rick Gomez, executive vice president and chief marketing officer, Target.

"That’s what they’ll see reflected in this test—a free and easy way to be rewarded simply for shopping at Target. On top of the shopping benefits, the program also aims to create a more personalized experience for our guests, like giving them a chance to help direct our community giving in their own backyard."

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