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Carlson Marketing, PayPal Team for Rewards

New partnership marks a first for consumer incentive redemption options

Carlson Marketing has partnered with PayPal to expand its consumer reward options. The deal, announced last week, offers Carlson’s client loyalty and engagement participants the opportunity to exchange accumulated reward points for a dollar amount deposited into their PayPal accounts. The partnership marks PayPal’s first foray as a collaborator in the rewards space.

PayPal has been looking to expand its platform by opening itself up to allow outside partners and developers to leverage its core functionality in new ways, said Dan Schatt, senior director and head of financial innovations at PayPal, He called the Carlson partnership a key example. He said the company plans to partner with the "entire ecosystem" of payments and rewards. Currently, PayPal has more than 78 million active accounts.

While the current partnership only encompasses consumer programs, Patty Saari, vice president of engagement & events for Carlson Marketing, mentioned that there is great potential for the PayPal rewards option could be expanded into corporate rewards catalogs as well.

Shatt said that today's rewards selections typically tend to be static and limited. "We saw the opportunity to combine efforts with Carlson and PayPal as a way to address some of these shortcomings that are currently in the rewards redemption market. With our collaboration, consumers will now have the ability to redeem their rewards points for a dollar amount that will be available instantly to any e-mail of their choosing in 65-plus countries."

Under the deal, clients can redeem their accrued reward by selecting the PayPal option from their catalog. The recipient will then receive an e-mail to confirm the transaction and immediately have the ability to spend their dollars online at any retailer who accepts PayPal payment options. Recipients can also opt to send the money to friends and family by e-mail via PayPal’s person-to-person capability feature. Those who do not already have a PayPal account will be prompted to visit the PayPal site and open an account.

"Being able to broaden the sweep of rewards that really are appealing to consumers is the secret sauce here," added Saari. "We've seen a growing need from and request from the consumer base to really have access to a spectrum of rewards that vary from person to person by geographic location, by income brackets, by tastes."

Both noted how the immediate nature of the reward and how having a real-time option in an incentive toolbox is a key strength in the partnership. According to research conducted by Carlson in October 2008 cardholder loyalty was tied specifically to the recency of redemptions. Saari said, "We've been able to use that very compelling argument over the last year with our clients and that's why PayPal made a very logical element to add in."