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What Banks Won’t Tell You About Private Label Credit Programs

For finance and marketing executives at large direct mail companies, understanding the dynamics of private label credit programs is crucial. When partnering with banks for these programs, it’s essential to recognize that the bank often reaps more benefits than your company does. By establishing your own private label credit program, you can retain interest revenue and control valuable customer data.

Companies that offer a private label credit program are ahead of the game, providing customers with the opportunity to buy now and pay later. Not only will you gain more revenue, but customers are also likely to buy more products because you’ve just removed a barrier to purchase for them. 

Studies have shown that revenue streams spike up quickly once a company launches a credit offering. Take Macy’s for example: between 2021 and 2022, sales from their credit program jumped from 35% to 49%. 

While buy now, pay later options are coming on the scene, data shows that more traditional private label credit cards are still more prevalent by far and still growing. US private label credit card transaction value reached about $258 billion in 2023—almost four times the size of buy now pay later (BPNL) transaction value. 

If your multi-title catalog company has not yet launched a private label credit program, the prevalence of these programs in the industry means you should seriously consider your options in order to stay competitive. However, the best private label credit advantages are offensive strategies, not defensive strategies.

The Hidden Costs of Bank-Managed Credit Programs

The Advantages of Owning Your Private Label Credit Program

Find A Partner Who Knows Direct-to-Consumer Credit for Catalog Companies

Launching a private label credit program, and working with a tool like ZAPFI Credit Program by IMS, uses data to drive higher AOV and order frequency. You now own that data. You don’t have to go through the bank to get it, or worry that the bank will siphon that data for their own use, like to sell to other companies, including your competitors. 

While companies get squeamish about the risks and costs of bad debt, those same companies are already spending millions in marketing costs now, using margin-eroding discounts and offers to woo buyers. With a private label credit program, you’re swapping marketing costs for profitable incremental revenue that’s more effective at acquiring and retaining the customers your business needs than marketing incentives.

ZAPFI is actually a unique option because we’re direct marketers ourselves who know how to operate in-house credit programs for catalog brands. We have more than 30 years’ direct-to-consumer credit experience with a proven track record of managing and driving profitable growth for our catalog clients. We help clients reap rewards without siphoning customer data as a bank would. We also know how to make your credit offering a huge success. 

You won’t be alone as you promote, manage and grow this new program. We’ve been at this for decades, and we’ll be with you every step of the way. 

With a private label credit program, customer acquisition improves. So does the higher average order and lifetime values. The client experiences we’ve seen with ZAPFI when clients roll out a credit offering prove this and the data clearly supports it. You’ve just found a way to remain competitive with others in the industry who have a private credit offering. Driving incremental profit is no longer a wish or a goal: it’s actually happening.

Empowering Your Business with Private Label Credit Programs

Don’t let banks capitalize on your customers. Take control of your financial destiny by establishing a private label credit program. Contact us to explore how your company can benefit from this strategic shift, ensuring that you, not the bank, reap the rewards of your credit offering.

Book a Demo to learn more, or check out our case studies.