Target Corp. plans to phase out its “smart card” technology this summer due to limited shopper use less than three years after it was introduced.
The computer chips on its Target Visa cards allowed cardholders to download discount coupons from the Internet or from in-store kiosks to use at Target’s retail stores. Target’s Visa credit card program, started in 2002, will remain in place. Despite some problems, the program was still considered a success, delivering more than 9 million accounts.
Some analysts said that Target spent millions to get its Smart Coupons loyalty program up and running, but not enough on marketing to educate customers about how to best use the technology.
Software problems at the kiosks and at checkout further aggravated the situation.
“I would say that Target ran before they learned how to walk,” said John Gould, director of consumer lending and bank cards at research firm TowerGroup.
In the short term, Gould said Target’s problems with Smart Coupons could delay other issuers rolling out smart card programs.
“A lot of people hesitated about smart cards and watched Target to see how it would do,” Gould said.
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