Disney's fabulous,credit card guaranteed to extend the magic

[CasualObserver]

Okay, all sarcasm aside.

My problem with the Disney Visa card is that it, to me, is indicative of a management philosophy of dipping ever deeper into the pockets of the loyal fans rather than extending the fan base. It appears that mgmt feels that they are unable to gain new fans (e.g. Iger's comment about the 90's being an "aberration").

While I didn't take advantage of the MKC (it ended when I had the opportunity to take advantage), it was a pure benefit to the card holder because it gave discounts and could be obtained free. It expanded the base by encouraging new customers to travel to the parks.

Then came The DC program when the ability to get a free card ended and it only became useful to people willing to spend over $250 on products before seeing a payback. This didn't try to expand the base because it carries with it a perception that it is for people who travel regularly to the parks - not the first-time or one-time visitor.

Now we have the Disney Visa which, while not carrying a fee, carries a much lower "reward". This, again, is targeted at the loyal because the redemption of rewards is made with Disney alone. Therefore, it is the loyal who would get the card and use it during the months coming up to their trip in order to redeem the reward during their travels. The first time or new customer is not going to jump through those hoops.

If Mgmt keeps on the path of trying to extract more money from a shrinking base, they will lose their base altogether. In prior years, Disney exceeded expectations and, in doing so, expanded their customer base. Closing attractions without replacements, turning all shops into clones of each other with respect to their product offerings, developing sequel after sequel, and similar mgmt actions does not result in exceeding expectations.

In order for Disney to return to it's former self, mgmt must show that they are not bankrupt of ideas, not suffering from a drought of determination to exceed expectations, and not focused on fleecing their oyal customers. Mgmt simply needs to return the ideal of providing top-quality, unique entertainment at reasonable prices. I say they have failed. The entertainment values slip each and every year .


Casual Observer

 

[freediverdude]

I agree with d-r. Disney is letting these other companies decide who will get to participate in a "magic fun-filled" card based on a credit score or some other type of profiling, and I think it's a mistake. Whether or not it's a replacement for the DC is irrelevant- the point is, Disney is not making the decision of who gets this card, and potentially turning off frequent and loyal guests who would like to use it, and have even shown responsibility with credit to Disney directly by having use of those room keys with a credit card attached! Christa is right about one thing, Bank One is not looking out for who would be the best customer for Disney, they're looking for the type of profile account that they want to include in their portfolio, regardless of how it affects Disney. And that is what is wrong, and why Disney shouldn't be doing this. I guess I'll go ahead and accept one of about 5 other pre-approved offers (not "invited to apply", but pre-approved) i received while waiting to see if I got the Disney card, and call that my Disney card- maybe tape a Mickey on it or something. Like I said, Goodbye Bank One! And I hope Disney wises up about how it's affecting all the guests who didn't fit into Bank One's little profile.

 

[KNWVIKING]

Years ago when GM started their rebate card, they were virtually accepting everybody. People I worked with who had been turned down by Sears were getting the card. While I understand what GM's motivation was for doing so,were they really doing these people a favor by allowing them to get further into debt ? It's even worse today. Look at the number of bankruptcies(sp) being filed by everyday people. A local lawyer I know files 500 case a month, and were talking about a small town in South Jersey. CC companies know your financies almost as well as you do. They know your income,they know your debt, AND they know your potential debt. Potential debt is a pocket full of credit cards with zero balances. You my have a great credit rating,zero balances,good income,etc. but if your potential debt ratio gets too high they will turn you down. Someday add up all the availible credit you have in your wallet or purse. If you sudden maxed all your cards buying DVC points, could you afford to make all the payments ? As crazy as this may sound,CC companies will assume this is a possibility before they issue a card. And none of this is Disneys fault.

Just think, if Disney had just offered both the DC and Visa card, we could all concentrate our energies on more important threads, like Little Red, My Peoples and Chicken Fingers. Or maybe take a walk around the neighborhood with DW.

 

[cindyfan]

So, to summarize:
AmEx/DC combo:
annual spending: $52000 (for example)
reward value: $508 (assuming you can get $200 in discounts out of DC in a year; you might have to spend another $800 to "save" this $200!)
fees: $120
net benefit: $388

Disney Visa:
annual spending: $52000 (for example)
reward value: $520 (no matter what you use it for at WDW!)
fees: $0
net benefit: $520

But, you see.....it has so much to do with the way you use the AmerEx.....
trying to use AmerEx rewards for Disney tickets etc...just is not as benificial as so many other uses.....
For example:
We use the AmEx pts for Car rental....you get $ for PT there....so if I plugged that into your equation.....
reward value: $520 for car rental + $200 in DC discounts = $720
fees: $120
net benefit: $600
DING DING!! AmEx wins by $80

That is just one example. Here's another:
What about using AmerEx pts for airfare?
I can take that 52000 pts convert them to airline pts and "on average" from what it usually costs to fly for us.....We can get 2 free tickets to FL. Avg cost for us $300......therefore we have now raised our AmerEx net benefit to $680!!!!!

I don't think at this point you can convince me the Disney Visa has a better rewards program than AmerEx.

IMHO.....my Target Visa has a much better rewards program too! For every $1000 spent you get a coupon to save 10% for one day with no limit at Target stores. So this has alot of potential. I've already saved $50 having just spent $3000. That is 1.6% And it is on things I am going to buy anyway....like toilet paper and laundry soap. And they donate 1% to my school!

 

[KNWVIKING]

The comparison was Amex diz rewards vs Diz Visa reward.

You can get a BJ's (similar to a Sam's Club) Visa. Pays 1% on all purchases, 1.5% on BJ purchases. If you routinely spend $600 per year at BJ's anyway,the use their card. When you accumulate $50.00 in reward,make needed purchases at BJ's, use the reward, and put the cash you would have paid into a WDW vacation account.

Virtually all reward cards have the same reward level,just base it or state it a little differently. What seperates them are the "extras", like no annual fee (very rare for a reward card) or potential additional perks, (as the Diz card already has & have teased about additionals).

 

[d-r]

Originally posted by disneychrista
Because this is a Credit Card not a discount program (ie Disney Club). I see it as two seperate programs. The Credit Card is not replacing the Disney Club because they are not the same thing. As far as I can see there are NO discounts, per se, in connection with the Disney Visa Maybe once the Club closes at the end of the year this will be added, but I for one, am not holding my breath.

Disney made the decision to close the Disney Club. Bank One along with Disney made the decision to start a Disney Rewards Visa. Did one have to do anything with the other? I am not convienced.

Ummmmm, Christa....

The whole point of this visa was that it was to replace the disney club....

From the LA Times last October:

Disney said Monday it would replace the Disney Club with a "co-branded" Disney/Visa credit card with which customers will be able to accumulate points that can be redeemed toward discounts on Disney merchandise and vacations.

And from the Orlando Sentinal, concerning the demise of the disney club and the introduction of the credit card:

"We have not forgotten these club members," Foster said. "We do feel like we're developing a program that is going to be much better than the Disney Club."

Originally posted by disneychrista
I am not sure how it even CAN be called a replacement, because that would be comparing apples and oranges

Actually, you got it! That is exactly the problem, this is exactly the point that I was making.

The problem is that this is not a good replacement for the disney club.

 

[d-r]

Originally posted by KNWVIKING
"I guess Disney gets a piece of that interest on all the unpaid balances each month..."

So pay your balance every month & don't allow Disney to collect any interest.

.

FWIW, they are getting a percentage of every purchase you make - the merchants pay a percentage for the credit card purchase.

 

[disneychrista]

Disney said Monday it would replace the Disney Club with a "co-branded" Disney/Visa credit card with which customers will be able to accumulate points that can be redeemed toward discounts on Disney merchandise and vacations.

This is the first time that I have seen anything (of course internet BB excluded) saying that the Visa was a replacement for the Disney Club.
I have read statement, including from the Disney Club website, about being able to/wanting to
deliver stronger promotional offers through other methods. But no mention of what those other methods are.

 

[KNWVIKING]

"FWIW, they are getting a percentage of every purchase you make - the merchants pay a percentage for the credit card purchase."

Generally, the percentage of sale the merchant surrenders goes to the issueing bank. I was always told the card sponsor receives the bulk of the annual fee and a portion of interest charges.

 

[BeautyLLM]

My husband works for one of the major credit card companies (not Bank One) and just explained how this works...

BankOne is the credit card issuing bank. They paid a huge up front payment to The Disney Company in order to become the "Official credit card of the Disney Company". They also pay for the actual cards (about $1 each) and for all the marketing of the new credit card program ie...they want not only for you to be a new card holder, but they come up with creative ways to get you to use your card (ie Disney points) and to revolve your payments.

The issuing bank makes its money by collecting late fees, interest and annual fees. Usually, after some given period of time or after a specified profit, the issuing bank will then split these profits with Disney.

The merchant bank is the bank that the store or restaurant sends it's receipts to at the end of each business day. The store receives payment on a charge purchase minus a "discount" from the merchant bank. Let me give an example:

I go to my local shoe store and charge shoes for $100 on my new Disney credit card. The shoe store sends the receipt to the local bank that they have chosen as their merchant bank, in this case called Leslie's Bank. Leslie's Bank sends the shoestore $98.75. In otherwords they paid a 1.25% discount on the transaction. The discount is split between the merchant bank (Leslie's Bank), the issuing bank (Bank One) and the VISA Company.

American Express is different because there is no "middleman" ie merchant bank. They take care of the entire transaction themselves. They offer alot of benefits to customers, but their discount is higher ( about 2.5 %) so, from Disney's point of view, if they can get customers to use the new Disney card more than AMEX at their parks and stores, their profits will be higher at the end of the year (because they will be paying a lower discount).

Hope this helps to clarify....

.

 

[crusader]

They paid a huge up front payment to The Disney Company in order to become the "Official credit card of the Disney Company".

Rest assured there is more money being gained than this.

My problem with the Disney Visa card is that it, to me, is indicative of a management philosophy of dipping ever deeper into the pockets of the loyal fans rather than extending the fan base.

Exactly -

These are the "collectors" and avid spenders. The fans will be enticed by the new card and line up to get one. They are looking for deals and consider themselves to be insiders when it comes to Disney.

Now, everytime they are presented with a purchase, they will contemplate using this card having been convinced there is something to gain here. The massive spending will be justified by the trinket distributed as a reward.

But who ultimately reaps the benefits? The merchant carrier and you can believe Disney as well. Eventually there will be an annual fee for this - similar to the free checking a bank first offers when it opens.

 

[BeautyLLM]

Also, it wouldn't surprise me if Bank One was the merchant bank, after all, Disney just severed a long relationship with SunTrust on property and replaced them with BankOne.

I said something recently in another thread (can't find my exact words) but I would like to try to repeat it here. The Disney Company is in business for one reason, and that is to make money. Anyone who thinks otherwise is too caught up in the "magic". The real magic of Disney is creating the illusion that their main objective is to give us happiness and pleasure, whether that be by making a theme park experience fun, or creating a fairytale wedding or making a wonderful family movie. The more we enjoy Disney, the more money we spend! I am not being at negative here...I love the Disney parks and movies and music and pins and I am perfectly willing to pay for all of it. The old addage "you get what you pay for" is true here...you pay a premium, but you get quality in return. The Disney Company profits, and everyone's happy. They did this new credit card deal to make money, not to give us Disney points. They are a huge corporation...this shouldn't be so shocking to everyone....

 

[MelissathePooh]

Everyone knows they (Disney) has done this to make money, and its obviously well within their right to do so as a business. I hope that Disney stays profitable. What the argument is that this transition from MKC to DC to Disney Visa has been misleading and does not offer the same benefits or advantages as what it is replacing.

MKC, which became DC was available to EVERYONE. Many loyal repeat guests/patrons of Disney are going to be excluded from the Disney Visa due to a variety of reasons, but thats okay with Disney because they will make more money on it. Its purely a business decision, but its not necessarily the best business decision in terms of public opinion from some of their most loyal patrons.

Does anyone know what the available benefits will be with the new Visa? What will the points be redeemable for?

Melissa

 

[YoHo]

Just to Clarify, Disney Never used Sun Trust in California. Disneyland has Ugh, I can't remember then name. Its a California Bank.

So while Disney World's Affiliation may have to do with this, it isn't company wide.

Also, its interesting that Disneyland Very recently switched from Arrowhead Bottled Water to Disani. Well after the Coke exclusivity stuff wnet through.

 

[disneychrista]

Quote from Disney Dream Rewards Dollars guide
Disney Dream Dollars are good for most Disney Merchandise, park tickets, hotel, food and more at participating locations. They can even be used in combination with special offers and discounts.


Once you've earned 20 Disney Dream Reward Dollars you can redeem depending on where you would like to spend them.
*A reward certificate good at Walt Disney Resort and Disney Cruise Line, available in denominations of 10 reward dollars.
*A reward certificate good at Disneyland Resort available in denominations of 10 reward dollars.
*A reward card good within the US at Disney Store, Disneystore.com, Disney Catolag available in denominations of 10 or 20 reward dollars.

 

[CasualObserver]

Originally posted by BeautyLLM
I said something recently in another thread (can't find my exact words) but I would like to try to repeat it here. The Disney Company is in business for one reason, and that is to make money. Anyone who thinks otherwise is too caught up in the "magic".

My problem with this has nothing to do with the illusion that Disney is not a business. It is, instead, from a business perspective that is the root of my disagreement.

Disney mgmt is operating from a purely short-term perspective -- i.e. Let's get this big payment from Bank One and make the quarter look better.

I would rather see them create programs to expand their base and, thereby, increase the profits of the company in the long term. Taking away MKC and replacing it with the paid DC, then taking away the DC and replacing it with the Disney Visa results in continually reducing the base.

Expanding the fan base for the long run will result in greater profitability for Disney.


Casual Observer

 

[BeautyLLM]

I agree with you on this CO...

Expanding the fan base for the long run will result in greater profitability for Disney.

but I disagree with you on this...

Taking away MKC and replacing it with the paid DC, then taking away the DC and replacing it with the Disney Visa results in continually reducing the base.

for several reasons...

*most of the people who participated in DC were already loyal Disney fans who were happy to get some discounts on Disney stuff. These people will grumble, but for the most part I bet they will keep coming back.

*many of the people who currently shop at TDS or go to WDW or DL have no clue what DC is...I can't tell you how many times I have used my DC card at TDS and had a guest ask me what it was.

*lately (as someone posted earlier in this thread), DC discounts have been very poor. You do better with the AP discounts and the Amex discounts. Unless you have children to shop for, there is nothing to buy at TDS, so DC is useless there. People who don't have an AP or an Amex can get better deals with Mousesavers codes than they ever could with DC.

*I think the lower attendance at WDW(according to what I have read, attendance really isn't down at DL) has more to do with the weak economy we are experiencing and possibly fear of terrorism which may be inhibiting people from flying.

So, yes, Disney needs to do something to increase the fan base, but I don't see where doing away with a basically useless "discount" club and adding a credit card and is going to hurt them in the long run.

 

[raidermatt]

Just think, if Disney had just offered both the DC and Visa card...

True, but sadly, they are not.

Regarding the deal between Bank One and Disney, its hard to say exactly what the arrangement is, but BeautyLLM's description is probably pretty close. Its very possible, however, that Bank One does not share the interest or fees with Disney at all. In many of these reward deals, the issuing credit card company (in this case, Bank One), pays the partner (in this case, Disney), a set amount for each reward point or dollar EARNED.

So its possible that Disney IS getting paid each time you use the card, and only Bank One loses out when the balance is paid off at the end of the month.

That said...

most of the people who participated in DC were already loyal Disney fans who were happy to get some discounts on Disney stuff. These people will grumble, but for the most part I bet they will keep coming back.

Quite a questionable strategy for a service company, dontcha think?

The real magic of Disney is creating the illusion that their main objective is to give us happiness and pleasure, whether that be by making a theme park experience fun, or creating a fairytale wedding or making a wonderful family movie.

Yet so many can easily see through this illusion when it comes to the Visa for DC/AMEX swap. Seems like the magician needs some better tricks!

Disney Dream Dollars are good for most Disney Merchandise, park tickets, hotel, food and more at participating locations.

One thing I'm curious about are the restrictions. The word 'most' is used, yet I didn't see in the materials what the reward dollars could not be used for. I suspect any restrictions are extremely limited, but am still curious...

This is the first time that I have seen anything (of course internet BB excluded) saying that the Visa was a replacement for the Disney Club.

With all of the opinions floating around, mixed with the real info, its easy to miss this stuff. But the clippings posted by D-R are consistent with Disney's statements last year when it was announced DC was going away.

 

[BeautyLLM]

Quite a questionable strategy for a service company, dontcha think?

I wasn't suggesting that this was a strategy, I was just stating that I don't think that Disney is going to lose alot of loyal fans due to discontinuation of the DC program.

Yet so many can easily see through this illusion when it comes to the Visa for DC/AMEX swap. Seems like the magician needs some better tricks!

Again, their main concern is the bottom line. Why does everyone seem so surprised by this?

 

[CasualObserver]

Originally posted by BeautyLLM
*most of the people who participated in DC were already loyal Disney fans who were happy to get some discounts on Disney stuff. These people will grumble, but for the most part I bet they will keep coming back.

*many of the people who currently shop at TDS or go to WDW or DL have no clue what DC is...I can't tell you how many times I have used my DC card at TDS and had a guest ask me what it was.

[/B]

My point is that Disney started out with a fan-base builder: MKC which could beobtained for free and just flat-out encouraged people to come to the parks. Then they dropped that to the DC which basically required $250 in purchases in order to start to pay off the initial fee. This is not something that a new fan is going to do. The new fan is going to first visit the parks, then buy memory items during the trip. This is the first example of switching from a fan expansion philosophy to an "exploit the existing base" philosophy. Now, they dropped the DC because after $250 in purchases, Disney wasn't getting the good end of the deal (10% off). Instead, they switch to the Visa which has a 1% "reward". This means that the same Disney fan must spend $2999 in order to get a $29.99 plush. Is a new fan willing to drop 3 grand with a Disney they haven't yet come to love?

Basically, they have increased the committment by an order of magnitude required by someone in order to get the same return.

*lately (as someone posted earlier in this thread), DC discounts have been very poor. You do better with the AP discounts and the Amex discounts. Unless you have children to shop for, there is nothing to buy at TDS, so DC is useless there. People who don't have an AP or an Amex can get better deals with Mousesavers codes than they ever could with DC.

Yet another reason to back up my assertion that Disney is attempting to put more revenue burden on fewer people. MKC was an excellent value, DC was not so great, Visa even less.

For you AP holders, I would be concerned. There is already storm clouds on the horizon in the form of Disney Mgmt unhappy that AP holders are about the only visitors to DCA. I'm sure they are well into the search for a way to dip deeper into your pockets. <

*I think the lower attendance at WDW(according to what I have read, attendance really isn't down at DL) has more to do with the weak economy we are experiencing and possibly fear of terrorism which may be inhibiting people from flying.

First, I never said that WDW attendance had anything to do with Visa.

Second, I don't by into Mgmt's line that WDW is bad solely because the ecomony is down. If that were true, then other parks would be suffering as well, but Universal is up as are other parks. That line is simply more Mgmt finger-pointing. The economy is down, 9/11 happened, but other parks are up, why not Disney?
I say it has a lot to do with percieved value.

Casual Observer