Virgin Plays Loyalty Tune

Cancel the funeral for the retail music business. Virgin Megastores has created a rewards program that it hopes will stem music downloads and drive audiophiles into its North American shops. And it seems to be working.

Shortly after launching the V.I.P. customer loyalty program last December, the chain sent an e-mail blast to welcome members. To date, 92% of recipients have made a retail purchase, and the club has attracted 40,000 members.