Another Intrusion into Banking Services

Joe Swatek August 27th, 2010
Marketing Insights

While most banks and credit unions offer a Christmas Club savings account, few promote the service to customers, members, or the public. That lapse allowed retailers to make another inroad into what was once a banking-only domain.

In 2009, Sears and Kmart, both owned by Sears Holding Corp., offered a branded Christmas Club card. The system worked like the traditional banking account. Consumers accumulated $5, $10, or whatever amount deposits, and got the club-specific, store-branded gift card in time for holiday shopping.

The key for these retailers is, of course, the shopper must spend the entire balance of the card in their stores. Plus, they get much of the money months in advance of the purchases.

Even though the retailers used a low-key approach to advertise the Christmas Club last year, it was a success. Supposedly, “millions of shoppers” participated. So this year, the stores are doing more to promote the Christmas Club savings account, which includes allowing customers to open an account online. The retailers include in three-percent bonus feature for 2010.

With the success of the Sears/Kmart program, other retailers will jump at the chance, if they haven’t already, to offer a spend-it-all-here Christmas Club account.

Instead of standing by and watching another banking service taken over by non-banking businesses, shouldn’t community banks and credit unions step up and promote Christmas Club savings accounts in their own communities?

As always, announce the fact that it takes only a few dollars a week to build up an account so the accountholder can have an easy time buying gifts for the holidays. Include an attention-getting incentive, similar to the Sears and Kmart bonus or some other promotion.

Create your own branded club card, like the retailers, to remind shoppers it’s your financial institution that’s helping them with their holiday purchases. Use the card image in your advertising.

Most importantly, promote the fact that, unlike a Sears, Kmart, or any other store card, your club card can be used anywhere for any purchases.

While some might think a newcomer with a $5-a-week deposit is a borderline nuisance to your financial institution, remember the familiarity builds your brand in the consumer’s mind. When it’s time to open a checking account, apply for a loan, or use some other banking service, your financial institution is a likely place to go. Those $5 deposits can create a relationship.

It’s too late to fire up a Christmas Club savings promotion this year, but this is the right time to plan for next year. Get in front of the public early in 2011. Use your relatively inexpensive resources like newsletter, website, lobby posters, print, and social media. Encourage everyone to open a Christmas Club account with you.


Look at Sears’ Christmas Club card image and its three-percent bonus offer on the retailer’s promotional Web page.

This content is accurate at the time of publication and may not be updated.