A new triple-rebate loyalty programme from BabyMint is claimed to be so unique that the firm has filed for patent protection of the idea. The programme deposits cash rebates for credit card purchases into members' college savings accounts, made up of 1% of all card transactions, up to 20% from retailers, and the same total again as a 'Tuition Reward'.
Based on the recently launched BabyMint College Savings Credit Card, the programme gives consumers a 1% rebate on any credit card purchase, as well as rebates of up to 20% on every-day purchases made through the firm's network of over 700 retailers and 127,000 grocery stores. The merchant and credit card rebates are automatically tracked and deposited in the cardholder's college savings plan.
According to Financial Research Corporation, merchant and credit card rebates, such as those offered by BabyMint, have the potential to represent an incremental US$1.1 billion per year in assets to banks and investment management firms.
And through its new partnership with SAGE Scholars, the programme's participants also receive a matching scholarship credit, in addition to the merchant and credit card rebates they earn. SAGE Scholars contributes a matching donation to a scholarship fund in the programme member's name. For example, a US$100 transaction at PetSmart would result in a US$7 merchant rebate, a US$1 credit card rebate, and an US$8 Tuition Reward. In this example, that's a contribution of 16% of purchase price toward the cardholder's college savings goal.
"Depending on when a parent or grandparent enrols in the programme, they could save thousands towards the spiralling cost of higher education", explained Mike Mitchell, CFO at BabyMint.
And in a recent survey by funds management company TIAA-CREF, almost half of the parents questioned (48%) said they have saved less than 10% of their anticipated educational funding needs. "Educational funding is a financial planning problem many families wrestle with, regardless of whether they are looking at public or private schools," explained James Johnston, chairman of SAGE Scholars.
The new programme is so different from others that the firm has filed for patent protection. "Whether it's facilitated by a credit card, stored value card, or other device, this is a first-of-its-kind financial services product," said Mitchell.