PUEBLO FLIES CO-BRANDED VISA CARD TO VIRGIN ISLANDS

DEENA AMATO-McCOY

POMPANO BEACH, Fla. -- Pueblo Xtra International here is offering its St. John and St. Croix customers Pueblo gift certificates in conjunction with the launch of its co-branded credit card in the chain's six U.S. Virgin Islands stores.

The addition of the six stores in February completed Pueblo's chainwide rollout of the co-branded credit card, which went live in its 46 stores in Puerto Rico during May 1995.

"We issued 31,800 cards throughout our Puerto Rico stores in 1996," said Dan Cammarata, controller for Pueblo Xtra International. "Since we are the only supermarket on the island offering a co-branded credit card, it has been very well received by our customers."

Customers receive a $5 gift certificate and a free Blockbuster video rental upon signing up for the co-branded credit card. As customers accumulate $500 in charges, they are rewarded with a $10 gift certificate and a free Blockbuster rental to be redeemed at any Pueblo store.

"We paid out well over $60,000 in $10 coupons and free video rentals to our card holders last year," said Cammarata. "Our customers earn multiple gift certificates per year based on their purchases. This proves there is significant usage of the Pueblo card."

Pueblo is also emphasizing a link to its customers by direct mailing of coupons in monthly credit card statements. Cammarata said this serves a dual purpose. "By sending them coupons, we get the message to our customers that we value their loyalty. In addition, we can track how many customers are coming into our stores based on the coupons that are redeemed at Pueblo."

The retailer joined forces with Visa U.S.A., San Mateo, Calif., and Banco Popular, Hato Rey, P.R., to promote customer loyalty through the Pueblo Visa card.

"We are looking for different ways to distinguish ourselves from competitors, and the incentives through the card are establishing more loyalty with our existing customers," he said. "There is increased traffic in our stores, and the gift certificates keep our customers coming back to our stores."

According to a source familiar with the program, the retailer could see a return on investment within two years from the initial launch. Though Pueblo declined to comment on specifics, the retailer is happy with the rollout.

"It is progressing better than our estimations," Cammarata said. "We did not have a lot of statistics when we pursued the venture, especially since we were the first ones on the island to offer a card, but it has been a favorable project and we are pleased with the response."

Pueblo is offering an introductory annual percentage rate of 9.95% and no annual fee to customers who apply before Aug. 31. After the deadline, the APR will be 16.95% and the annual fee will be $24.

The Pueblo Visa card can be used anywhere Visa is accepted.