Loyalty & Rewards

Amex And Newegg Pair Up To Make Checkout Rewarding

Newegg is one of Web commerce’s more interesting stories about evolution over the decade and a half, because, contrary to its name, Newegg isn’t really so new these days.

Founded in the days after the Web’s first round of booming and-busting adventures in 2001, Newegg was a very focused eCommerce effort that stayed afloat when lots of business were going belly-up, because in some sense it was selling the right thing to the right group people online: computer hardware and software. The firm saw its annual sales approaching the $2 billion mark and the firm even filed for a 2009 IPO that was aimed at $175 million (back in 2009 when that was still a large sum).

But that IPO never quite materialized, and was quietly withdrawn as Newegg’s sale plateaued and Amazon became an increasingly fierce and dominant competitor in their product line. Newegg was once proudly the home of “geek” eCommerce, but Amazon offered those geeks better buys and in many cases better quality goods.

The situation wasn’t helped by a counterfeiting scandal with Intel computers that got very publicly called out — nor by a spate of former employee lawsuits that alleged, among other things, that Newegg had instructed them to illegally hack the competition.

And with pressures converging — and the digital marketplace becoming increasingly competitive and less kind to niche players like Newegg — the last few years have seen the company hit the reset button and envision a “new” Newegg. That has seen the launch of Newegg Premier, their $50 alternative to Amazon Prime, and the expansion of their product offerings beyond hardcore tech into softer focus areas like consumer electronics, health and beauty products and accessories.

And the focus on re-invention in the last few years has in many ways made Newegg a good collaboration partner for American Express. Amex has spent the last 18 months or so struggling to hit a reset button of their own in the hopes of moving past the end of the Costco relationship and the resulting high speed come apart in investor confidence in the firm’s future.

American Express has gotten some good news of late: The firm managed to beat analyst expectations on its top and bottom line earnings during the last quarter, which sent investors’ hearts a flutter and sent stock price heading north for the first time in a while — but that surge of confidence still largely reflects the fact that the reality was less bad than the predictions. American Express’ earnings are still falling — and that means that reset button is getting all the more important to hit.

Which leads to the the newest team-up with American Express and Newegg, which will allow Amex members to plug their rewards points directly into purchases at checkout, meaning they can pay for part or theoretically all of their Newegg buys with points.

“We’re always looking for new ways to deliver our Card Members more value, choice and flexibility where they are already shopping — such as Newegg — to further enhance and expand the ubiquity and utility of our Membership Rewards program,” Dave Wolf, VP of Digital Partnerships & Product Development at American Express, told PYMNTS in an email exchange.

“We’ve been working for years with Newegg and our latest pay with points integration marks an even deeper digital integration with Newegg following the launch of Amex Express Checkout on their site in 2015. Our Card Members with a Membership Rewards Card can now seamlessly use points for purchases made at Newegg.com.”

Amex Express Checkout is a service American Express launched last year that allows retailer to put a one-click pay button on their checkout page; it is similar in concept to PayPal or Visa Checkout, though a good deal less widely used than either.

And while American Express does think that the new tie-in with their points-based loyalty program might help push adoption by making it easier to pay with American Express, they don’t require shoppers to use it to access the program.

“Card Members can use points at checkout, directly in the payment flow without ever leaving Newegg.com as well as check their points balance and the equivalent dollar amount,” Wolf explained. “Using points just requires an eligible American Express Card enrolled in the Membership Rewards program or using Amex Express Checkout with an eligible Card.”

Shoppers can select “Check Points Balance” to see get their points and the equivalent dollar value and designate how many points to use for all or part of your purchase. After that users just confirm — and they do all of this without ever navigating away from Newegg’s site.”

The rewards program works for any goods or services Newegg sells — “products from hardware, gaming and consumer electronics, but also unexpected items from ATVs to beauty gadgets” — but does not work with third-party sellers that are selling on Newegg’s marketplace.

This is not American Express’ first venture into allowing its points to be used more directly as digital currency. Similar deals have been announced with notable names like Uber, McDonald’s and Best Buy (online) — and Wolf noted that they look forward to pushing the technology further in the coming months.

“Our closed loop advantage allows us to partner with innovative retailers like Newegg to create a strong payments integration that brings pay with points to online checkout, and offers Card Members a unique way to use digital currency for everyday purchases.”

As for Newegg’s part, Merle McIntosh, Senior VP of Sales & Marketing for Newegg, noted the choice was essentially an easy one, given the persistent customer demand for checkout experiences that are smoother and more likely to make rewards integration a more easily accessible and automated part of the experience.

“Our customers have come to expect a first-rate checkout experience with great flexibility in how they pay for purchases. This makes it simple for American Express Card Members to use their Membership Rewards, which is a big convenience for many of our customers. ”

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