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Synchrony Bank to use big data to tailor cardholder offers

Kelly Dilworth

If you own a store card from a major retailer such as Wal-Mart, Lowe’s, Toys R Us, JCPenney or Ashley Furniture Home Store, you may soon begin receiving targeted offers on your cellphone for products that are eerily similar to ones you already purchased.

Beginning in September, Synchrony Bank — the issuer behind a number of popular store cards, including the Sam’s Club MasterCard, the Gap Visa and the eBay MasterCard — will begin offering cardholders personalized pricing and discounts based on data it gleaned from Synchrony Bank-issued credit cards.

Synchrony Bank to use cardholder data for targeted coupons

According to The Wall Street Journal, which first reported on the initiative, Synchrony Bank’s “Next Best Offer” program will analyze cardholders’ transaction history using a popular big-data analytics tool called Hadoop, and use those insights to tempt cardholders with personally tailored coupons delivered through their email or mobile phone. Cardholders may also be rewarded with discounted pricing if their transaction data shows they frequently visit a particular store.

So far, Synchrony Bank hasn’t made any formal announcements about the program or published further details. It’s not yet clear what kinds of offers cardholders will receive or how often they will receive them. But according to the Journal, the data that will drive the offers is robust.

For example, Synchrony has access to approximately 3,500 data points on individual cardholders and uses that data to analyze what they buy, how often they shop and where they look for new merchandise. Scrutinizing a card’s transaction history can also reveal more personal insights, such as your hobbies and personal preferences, what kinds of products you prefer (for example, do you prefer luxury products or discount goods?) and how much you’re willing to pay for them.

“You swipe one of our cards, we collect a lot of data,” boasted Synchrony’s chief technology officer Greg Simpson in an interview with the Journal’s Kim Nash. Simpson also disclosed that Synchrony will be looking at data culled from other “more diverse sources,” but didn’t elaborate on what kinds of sources the issuer will use.

Will everyone receive better deals?
Synchrony’s “Next Best Offer” initiative is notable because of the huge number of cardholders who will be affected. Dozens of major retailers partner with Synchrony Bank on their store-branded cards, including Wal-Mart, Lowe’s, Toys R Us, Ashley Furniture HomeStore, J.C. Penney, Gap, T.J. Maxx, Stein Mart, Men’s Wearhouse, LensCrafters, Belk, Dick’s Sporting Goods, American Eagle Outfitters and more.

The new initiative could mean thousands of cardholders who hold store-branded credit cards issued by Synchrony will enjoy exclusive deals and bargain-basement pricing for goods they were already highly likely to buy. But critics of similar big data initiatives that use consumer data to tailor offers say that personalized pricing doesn’t always mean consumers are rewarded with better deals. In some cases, retailers may also use consumers’ personal data to justify offering higher prices for certain goods.

The next time you receive an intriguing offer from a store affiliated with your credit card, be sure to do a price check and compare the offer with similar goods that are sold online. You may find that the offer you received isn’t nearly as tempting as it seems.

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  • Barbara Kostelnik

    Can’t pay my Amazon store card bill on Synchrony’s non-working web site!