PRICE CHOPPER CREDIT-CARD PLAN ENDING AS BANK WITHDRAWS

ELIZABETH MORROW

SCHENECTADY, N.Y. (FNS) -- Customers at Price Chopper Supermarkets here will not be able to earn rebates based on their charges to the chain's co-branded credit card after Dec. 31. The cards themselves will expire Jan. 31, 1998.

The program, which began in September 1995, offered cardholders 2% rebates on purchases, allowing them to earn up to $500 per year. Rebates were good at Price Chopper stores only. The retailer had circulated a total of 15,000 Price Chopper Visa cards, 12,500 of which are active, in conjunction with M&T Bank, Buffalo, N.Y.

The problem for M&T Bank was that too many customers paid off their credit-card balances every month, said Kathleen Young, an M&T Bank spokeswoman.

"The card had not met M&T's financial projections," said Joanne Gage, a Price Chopper spokeswoman. For the retailer, however, the program was positive.

"Once the customers got the rebates, they loved them," said Gage. "The customers were very happy with the program."

While Price Chopper declined to supply current figures for the rebate program, Larry Friedman, vice president of financial services at Price Chopper, told SN earlier this year that "Price Chopper pays out about $500,000 per quarter to our customers based on their card purchases," adding that the retailer had paid a total of $1.6 million in rebates in 1996.

Friedman had also been quoted earlier as saying the retailer was considering tying the co-branded credit card more closely to Price Chopper's loyalty-marketing programs. "The customers will see a magnified impact on their 2% rebate if we integrate our credit card with our other rewards program. The key is integrate -- one card that does it all."

"Larry Friedman's comments referred to our vision of the future, that one card could serve multiple purposes, such as credit, debit, discounts and frequent-shopper programs," said Price Chopper's Gage.

"We will seek another financial institution to partner with us on a co-branded card," she added. "We would like the card to be as attractive as this card was to our customers. We expect it to take some time to obtain a new partner, so we have no plans to offer another card at this time."

The rebate certificates will be good for one year after the program ends. Cardholders can request an M&T Bank credit card to replace the co-branded Price Chopper card, said bank spokeswoman Young.

In October 1996, M&T Bank terminated a similar co-branded credit card rebate program with Giant Food, Landover, Md. That retailer was able to switch financial partners to continue the program, after obtaining an injunction in U.S. District Court in Greenbelt, Md.