Monthly Archives: May 2018

25May 2018

Memorial Day weekend travel: Here's what you need to know – Milwaukee Journal Sentinel


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Milwaukee Journal Sentinel

Memorial Day weekend travel: Here's what you need to know
Milwaukee Journal Sentinel
… AAA does not expect gasoline to come anywhere near 2014 levels, where the national average was $3.66," the organization said. The majority of Memorial Day travelers — 36.6 million nationally and 733,397 in Wisconsin — will travel by car, SUV or
Record number of people expected to travel for Memorial Day holiday weekendKGO-TV
Holiday travel forecast: Rain expected across Southeast through Memorial DayWJXT News4JAX
How bad will traffic be this Memorial Day weekend?ABC Action News
KUSI -cleveland.com -TheStreet.com
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16May 2018

Whole Foods Unveils Rewards for Amazon Prime Members – Food & Wine


Whole Foods Unveils Rewards for Amazon Prime Members | Food & Wine

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16May 2018

The Mysterious Heir of Extreme Travel – RollingStone.com


In March 2015, an elite group of adventurers boarded the Ortelius, an ice-strengthened cruise ship bound for Bouvet Island. The 29-day journey was long and arduous: Considered by some measurements the remotest landmass on the planet, the Norwegian territory lies in the middle of the south Atlantic Ocean, a forlorn speck between Antarctica and the bottom tip of South Africa.

As they sailed through the miles of icy waters, the ship’s 60-plus passengers traded the monotony of sea for mingling. Among them was William Baekeland, a young and unassuming outsider, who cut an intriguing figure. An inveterate travel expert at 22 years old, with a scrawny build and neatly combed hair, he looked more like a high-school student than an explorer. Shockingly, though, his knowledge of world geography was immense – he’d claimed to have already visited most of the 193 countries recognized by the United Nations. The other explorers onboard the ship – seasoned members of the Travelers’ Century Club, the Most Traveled People, and other exclusive societies – perked up in the company of the curious stranger.

Despite spending thousands of dollars to be there, the passengers were roughing it in cramped cabins cluttered with beds and luggage, while Baekeland stayed alone in a private room. In the Ortelius’ dining hall, he commanded attention, dropping obscure bits of geographical knowledge as the ship lumbered south. He asserted himself as a travel fixer, the kind of guru who could coordinate trips to the most far-flung countries, territories, islands and atolls that seemingly no one could access.

Baekeland didn’t immediately reveal it, but later claimed to have grown up wealthy, sailing around the world and attending prestigious schools. The Baekeland name was assumedly the source of that excess, as a cursory Google search revealed an association with great wealth stretching back generations.

According to people onboard the ship, he later said that his great-grandfather was Leo Hendrik Baekeland, a Belgian immigrant and chemist famous for inventing the precursor to modern plastic in 1907. The elder Baekeland’s invention, Bakelite – a chemical compound made of carbolic acid and formaldehyde – unwittingly paved the way for the birth of Twentieth-century consumerism and, in many ways, the modern world.

Everything about the young traveler betrayed an extreme wealth. "Absolutely we had the impression…[William] was never going to work again in his life," says Ortelius passenger Bob Bonifas. Fellow traveler Harry Mitsidis had a similar impression onboard the ship. Baekeland’s single cabin "made us believe his story," he said during an interview on the podcast Counting Countries. "When you appear on a ship of this type and have a single cabin, no one’s going to start questioning, ‘Where did you get the money for this?’"

By the time the journey to Bouvet ended in a circumnavigation of the island, the adventurers were wooed by the young man’s prowess and charm. They later resolved to continue traveling together. By that November, the explorers were trusting Baekeland with facilitating travel arrangements for their own expeditions, wiring him thousands of dollars to navigate the bureaucratic maze of paperwork to obtain visas, charter private planes and haggle with foreign governments.

Despite being a relative newcomer to the insular world of extreme travel – a competitive subculture of people who journey to some of the most obscure and treacherous corners of the globe, often at great monetary cost – Baekeland earned an astonishing amount of trust from the group in a matter of days.

As Mitsidis puts it, Baekeland’s demeanor was convincing enough to gain entry into the travel group’s inner circle. The young explorer was in some respects too peculiar not to be authentic. Baekeland seemed like "a throwback to [David] Livingstone," Mitsidis tells Rolling Stone, referring to the famous Victorian adventurer. "The old-style explorer with a hat."

Given all his eccentricities and expertise, how could he not have grown up with a bottomless family coffer to finance his jet-setting lifestyle? Mitsidis remembers Baekeland well three years after their encounter on the Ortelius.

"I’ve never met such a good liar," he says.

The camel market of el Fasher, Darfur, Sudan

A post shared by William Baekeland (@williambaekeland) on Feb 10, 2017 at 4:30pm PST


Jesse Simon Gordon was born
in Sutton Coldfield, an affluent suburb of Birmingham, England, in 1993. Verifiable details concerning his upbringing are sparse, but according to interviews with extreme travelers who knew him, Gordon’s life has taken a shocking turn over the past few years. From at least 2015 to 2017, his critics say, he gave the illusion of a well-heeled, globetrotting adventurer, offering to orchestrate travel to the kind of inaccessible domains that humans rarely go, for a price. But when it came time to deliver on his promises, he disappeared.

Gordon legally changed his name to William Baekeland in 2014, according to a close personal friend of his named Josh Radcliffe who spoke to Rolling Stone on his behalf. While sources in the extreme travel world suspect Baekeland had a humble upbringing – records suggest his parent’s home is in a working-class area of Birmingham, England – Radcliffe says his friend hails "from one of the most affluent enclaves in England outside of London."

Radcliffe says the allegations against his friend "have been blown out of all proportion to the reality." He blames Baekeland’s "creditors" for losing faith in a well-intentioned but failed business strategy.

Writing in an email, he admits that Baekeland is indebted to several people, but claims his friend isn’t guilty of purposeful fraud: "The truth is that [Baekeland] got himself into a financial mess as a result of insufficient capital in his business and some poorly planned trips," he says. Moreover, Radcliffe asserts that Baekeland did follow through on most of the trips that he promised. His financial travails weren’t part of a planned grifting, but rather borne of "a fledgling business hitting hard times," he says. Radcliffe, for his part, stopped responding to emails shortly before the publication of this story.

Harry Mitsidis claims the story isn’t so simple.

After spearheading an amateur investigation, in which he spoke with a number of travelers who’ve done business with Baekeland, Mitsidis estimates the young man pocketed around $835,000 from roughly 20 people. According to interviews Rolling Stone conducted with Mitsids and two other sources, the young man successfully carried out at least two trips, but there were nine more that they paid for either in part or in full but – because of decisions made by either the travelers or Baekeland – didn’t come to pass. They claim they’re owed money by Baekeland for these trips.

These sources say Baekeland has yet to make good on reimbursements for the trips that they didn’t go on. They confirm that legal action is being pursued in multiple countries, but many victims aren’t hopeful of ever getting their money back.

"Nobody’s ever going to see five cents out of this," says Bonifas. "The only thing we want do with him is make him suffer."

Tilicho Lake, highest lake in the world, Nepal

A post shared by William Baekeland (@williambaekeland) on Feb 10, 2017 at 4:34pm PST


When William Baekeland appeared on the Ortelius
in March 2015, he’d already cultivated a persuasive backstory – one that made sense for a peripatetic aristocrat who didn’t say much about his family. In a sense, using the Baekeland name was genius. The family owes its fame to the creation of Bakelite, but also a litany of scandals, from infidelity and incest to murder. Baekeland ostensibly used their sordid past and present-day obscurity to create his subterfuge.

After Leo Baekeland’s invention helped spur the growth of countless consumer products, the family lived as nomadic gentry in New York, London, Spain and France. In 1939, Leo sold the Bakelite Corporation to the chemical giant Union Carbide, solidifying his family’s fortune. However, Leo’s grandson Brooks managed to dash the family’s unilateral image of success.

Brooks married the model Barbara Daly in 1942, and the couple quickly became prominent socialites who, up until the 1960s, hosted Manhattan soirees and traveled extensively. They had one child, a boy named Tony, who grew up surrounded by opulence, but always in close proximity to his parent’s toxic marriage.

The Baekeland family drama was chronicled in the 1985 book Savage Grace, a scrupulously reported exposé that drew on interviews with the family’s closest friends. According to Hugh Karraker, a Baekeland family descendant, the book was "a major embarrassment to everyone in the family." He confirms that all of the unsavory assertions in the book are accurate, to the best of his knowledge, and says the publication of Savage Grace caused the family to further retreat from public life.

In addition to shedding light on the family’s grandiose lifestyle, Savage Grace chronicles how Brooks cheated on his wife, and eventually left the family for a much younger woman. Tony lived with his mother, who suffered from bouts of alcoholism and depression, while he explored sexual encounters with men. Barbara, uncomfortable with her son’s forays into homosexual relationships, attempted to "save" him through her own seduction. The family’s ultimate undoing occurred in 1972, when Tony murdered his mother with a kitchen knife in their London apartment. When the cops responded to the scene, they reportedly found Tony placing an order for Chinese food.

After spending seven years at Broadmoor, a high-security psychiatric ward in England, Tony went back to New York to live with his grandmother. Less than a month after arriving, he attempted to murder her, again with a knife. Tony was sent to Rikers Island, where he died by suicide, suffocating himself with a plastic bag.

William Baekeland ostensibly absorbed this backstory and simply told travelers that he didn’t enjoy talking much about his personal life. Writing about Baekeland in his Nomad Mania newsletter, Mitsidis explained that "William had said that there is no information about the family because they pay Google to delete the results."

Radcliffe says that the 2014 name change occurred after Jesse Gordon experienced a "particularly bitter and unusual family estrangement." He claims his friend chose the Baekeland name because he is, in fact, a "distant, collateral relation of a Baekeland." Karraker, for his part, says he has never heard of a William Baekaland or a Jesse Gordon.

Regardless of the conflicting narratives, it helped that Baekeland was someone who peddled a story so riddled with visceral detail that it was hard to refute. In 2013, he began interning remotely at The Best Traveled, a website founded by Harry Mitsidis. According to his resume he gave the site, Baekeland had studied at an array of prestigious schools, including the Harrodian in London, Institut Le Rosey in Switzerland and the International School of Monaco. Astonishingly, he also claimed to have studied at Kim Il-Sung University in North Korea, which would have made him one of the only westerners to ever study in the rogue, authoritarian state. Mitsidis recalls never seeing him in jeans or a T-shirt during their travels together, only country club attire. His voice was as delicate and refined as a cartoon butler’s.

Trinidad, Cuba

A post shared by William Baekeland (@williambaekeland) on Feb 10, 2017 at 5:01pm PST

When he was interviewed by travel writer Ric Gazarian on Counting Countries, Baekeland said he grew up in a family of explorers. "We went on safaris quite a lot, we went to east Africa, Namibia, Ethiopia…we also went to the Congo," he said. (Rolling Stone tried contacting Baekeland’s family via telephone, but the listed number was disconnected.) He also boasted about his itinerant lifestyle in the TBT newsletter in 2016, saying that he had recently traveled on the "Kapitan Khlebnikov icebreaker doing the Northeastern passage from Anadyr to Svalbard." (Quark Expeditions, the company that runs journeys on the Kapitan Khlebnikov, didn’t reply to multiple email requests for comment.) He also said he’d chartered a "Britten-Norman Islander airplane" to Sable Island in Nova Scotia, Canada, where he "saw groups of horses running through the water at the shoreline."

Gazarian, who kept a casual correspondence with Baekeland, explains how the young explorer would occasionally send dispatches from his trips abroad. "He was this amazing creative writer," says Gazarian, recalling an email Baekeland once sent him about extreme violence in South Sudan. Gazarian, for his part, says he has no way of knowing whether Baekeland’s dispatches contained falsehoods, or if they portrayed his experiences accurately. His exploits certainly were believable, even in hindsight, given how they were documented on social media.

Baekeland was fond of promoting his exploits on the Internet. His Instagram account, active from January to May 2017, depicts a prolific world explorer’s life. In one shot, Baekeland stands ready to board a helicopter at Tilicho Lake, Nepal. In another, he’s standing among villagers in Darfur, explorer’s hat adorning his slim, grinning face. There’s pictures of first class cabins, a helicopter ride over the Swiss Alps and a luxurious hotel in Havana – even trotting horses with a caption saying they were in Nova Scotia. His affinity for digital bragging was documented on other platforms; on Twitter, he was posting as @SimonBaekeland as early as 2013, conversing frequently with other users about travel.

Despite all the hype surrounding Baekeland, one man had long harbored suspicions that the young heir was actually Jesse Gordon, the kid supposedly from Birmingham.

Mike Kendall first noticed something wasn’t right in 2011, when Gordon emailed him out of the blue, offering a luxury catamaran voyage from the Maldives to the Chagos Archipelago. Described in a brochure as "a unique adventure sailing trip to one of the most pristine ocean environments in the world," the adventure cost $5,000 for a single spot, payable directly to the young man’s personal bank account.

"He contacted me," Kendall says. "I don’t know where he got my email at all."

Kendall declined the overtures, but became curious about this unknown traveler, and began researching Gordon’s travels. After sleuthing around his online footprint, Kendall says he noticed Gordon was using the same picture on Linkedin that someone named William Simon Baekeland was using on The Best Traveled.

Baekeland "was making friends with as many people as he possibly could in the travel community," Kendall tells me over a washy Skype connection. "He seemed to be going everywhere all the time." But despite "openly calling him a fraud on Twitter," there was little Kendall could do.

In December 2013, Kendall contacted Mitsidis, founder of The Best Traveled, in an effort to expose Baekeland. Mitsidis was shocked to hear the accusation that someone was using an alias on his website, especially because Baekeland was still interning remotely for TBT at the time.

"At the time this incident seemed of minor importance," Mitsidis tells me. "I dropped [Baekeland] as an intern and stated even on the TBT newsletter we were no longer working or associated with him."

But despite getting fired from his internship, Baekeland was boarding the Ortelius a little over a year later, meeting Mitsidis in person for the first time.

After the journey, Mike Kendall’s early warnings were largely cast aside as a misguided vendetta. "I felt I’d been a bit of an internet troll against a kid who just wanted a little bit of anonymity," Kendall says.

If you bought into the story, Baekeland was going to make history as one of the world’s most accomplished explorers, bringing everyone he knew along for the ride. Only now his reputation is far different.

Preparing to fly across New York City and Northern New Jersey #nyc #newyorkcity #nj #newjersey #privateplane #airplane #lightaircraft #ewr #newark #ppl

A post shared by William Baekeland (@williambaekeland) on Jan 10, 2017 at 9:33pm PST

"My main purpose is I don’t want to see anybody else scammed by this sonofabitch," Bob Bonifas says over the phone, his voice growing testy as he recounts his experiences with Baekeland. Bonifas is a world traveler and corporate CEO who says he’s owed roughly $40,000 for trips arranged by Baekeland that never materialized.

As Bonifas walks me through his dealings with Baekeland, it becomes clear just how angry some of the young man’s alleged victims are. The vitriol isn’t entirely the result of missing money – Bonifas is a wealthy man, and tells me that the cash isn’t necessarily what’s keeping him up at night. It’s the overwhelming simplicity of the alleged con that goads him. The entire caper was predicated upon simple wire transfers, he says, all of which were willfully forked over to Baekeland’s checking account under the assumption that he could engineer trips to isolated hinterlands like Rockall and Johnston Atoll.

"The issue is being cheated," Bonifas says. "It’s the insult."

The only place Bonifas did reach via Baekeland was Palmyra Atoll, a pristine and unvarnished research station located in the remote Northern Line Islands, about 1,000 miles south of Hawaii. Baekeland coordinated the charter flight for six people, which would have cost under $5,000 per person, according to Bonifas. He claims the travel group was only on Palmyra for a few hours, but says he was charged $12,500 for the trip, and that Baekeland implored him and others to make a $10,000 donation to the Nature Conservancy, a non-profit that conducts scientific research on the atoll, as a gesture of goodwill. In an email to Bonifas, Baekeland claimed his family were regular donors to the charity, who had "giving arrangements with the owners of the island, for ongoing conservation work."

Bonifas was quick to indulge the offer, replying back: "I have no problem with the $10,000 donation or the cost of the trip…Get me confirmed."

Though the trip went through, the $10,000 donation never made it to the Conservancy, a source from the organization tells Rolling Stone. Baekeland claimed his bank confused Palmyra Atoll with the ISIS stronghold of Palmyra, Syria, and impounded the funds. (The bank declined to comment.)

Dominique Laurent, a French national who spent the majority of his career working in the oil industry, met Baekeland on the Bouvet expedition and went on a trip organized by the young man to the Central African Republic. But he claims he’s owed $60,000 for trips to Somalia, Democratic Republic of Congo, South Sudan and other journeys that have been canceled.

Because of their fierce individualism and competitiveness, some extreme travelers can become easy marks.. "William played to the ego, and there’s a lot of ego out there," says Terry Last, a traveler who went on the expedition to Palmyra. Extreme travelers are often vying against each other for various accolades, trying to chart more of the Earth’s yardage faster than their counterparts.

According to Last, part of Baekeland’s ploy was marking up the cost for journeys. Travelers don’t often study the granular detail involved with commissioning a private jet to an isolated desert island. "[William] learned very quickly that’s what a lot of travelers are like; They just pay up to get it out of the way to visit the place," says Last. "A lot of the big travelers are very, very wealthy. They don’t have so much spare time but they have plenty of cash. William was clever enough and shrewd enough to tap into that market."

Flying over Sable Island, Canada

A post shared by William Baekeland (@williambaekeland) on Feb 10, 2017 at 4:57pm PST

The size of the traversable world varies according to different travel societies. While the UN slices the globe into 193 member nations that form its legislative body, independent travel organizations make their own rules. The Travelers’ Century Club counts 327 countries and territories worldwide, whereas the Most Traveled People lists a prodigious 871 landmasses scattered throughout the planet.

Gazarian recalls Baekeland wanting to become the youngest person to visit every UN-recognized country. He learned through others in the travel community that Baekeland was planning a culmination party when he finally finished. "His last country was going to be Serbia, and at one point he was going to rent out an entire resort and fly in 100 journalists to mark the completion of his journey," Gazarian says.

Before that could happen, though, future travel plans booked through Baekeland began to fall apart. Months after promoting trips to a variety of places, such as the Desventuradas Islands off the coast of Chile, Baekeland wrote that he was experiencing a number of personal tragedies. According to Mitsidis, Baekeland claimed in his late 2016 newsletter that his sisters, Muguette and Ariadne, had both passed away from illness and suicide, respectively, within two months of each other. Then, while on a trip to Antarctica in February 2017, Baekeland said that his father died. Mitsidis wrote about it in his Nomad Mania newsletter, saying "the other passengers on the ship, including some of his closest friends from the traveler community, try to comfort him as best they can in this hour of crisis."

When the news broke, everyone rallied around Baekeland. "My heart broke for the guy," says Gazarian. "That’s an immense amount of tragedy for someone to live through in such a short period of time."

Despite the tragedy, Baekeland was pressing on. He was earning a kind of respect for his commitment to travel in the face of so much familial hardship. The ruse was again bolstered by his incredible knack for creating a storyline: Mitsidis later said that Baekeland claimed his mother flew a teddy bear first class to one of his sister’s funerals. The ceremony for his sister Muguette supposedly took place at Sleepy Hollow Cemetery in Westchester County, New York, Mitsidis said, next to the grave of the family patriarch, Leo Hendrik Baekeland. An employee of the cemetery says no one with her name is buried there.

Later that year, at the apex of all of Baekeland’s suffering, Mitsidis again heard from Mike Kendall on Facebook. Kendall, who had been following the young traveler for years, said he couldn’t "reconcile [Baekeland’s] willingness to organize and arrange tours with his lack of a social media profile and the use of aliases and nom de plumes." 

In their exchange, Mitsidis defended Baekeland. "William is absolutely legit," he wrote. "He is a multi-millionaire and charters planes to go to incredible places. Nobody will be able to compete with him once he’s done. I was put in an awful position due to your intervention back then but luckily I have been forgiven."

But soon after, Baekeland disappeared. Last October, he failed to show up to a trip in the Sudan. Shortly afterward, travelers received an email from Baekeland’s assistant, David Russell, claiming the young heir was in the hospital, suffering from a debilitating illness. Forthcoming trips organized by Baekeland – a total of six stretching from late 2017 to 2019 – were canceled. No one had heard of Russell before; Mitsids suspects the missive had been sent by Baekeland himself, an attempt to bide time as a mountain of debts to the various travelers began to swell.

Confused by Baekeland’s sudden disappearance, Mitsidis started to take Mike Kendall seriously. According to Mitsidis, public records showed Jesse Gordon’s birthdate matched the one on Baekeland’s passport, which he had seen while organizing trips. Searching further, he found public records for one of Jesse Gordon’s prior companies, which was registered to an address in Birmingham. From there, he found Gordon’s parents, and used their names to find the birth records of Gordon’s two sisters.

In a stroke of luck, one of Gordon’s sisters had a public Facebook profile, complete with a photo of her family, including her brother.

Blindsided and aghast at his findings, Mitsidis went back to the Facebook message from Kendall. "I want to send you a message," he wrote. "It’s about your suspicions 4 years ago… you may, just may, have been right all along."

Last November, in an email to various people who were familiar with Baekeland, Mitsids described the revelations as the group’s "day of apocalypse."

"Everything you think you know about William Baekeland is bullshit," he wrote.

After he confronted Baekeland about his alleged forged identity over email, Mitsidis received a reply from Radcliffe, who claimed to be Baekeland’s personal confidant and business partner in a new venture called Atlas Travel and Expeditions LLC. Since then, Radcliffe has acted as a liaison between Baekeland and those who say he owes them money.

Radcliffe says Baekeland’s alleged victims are greatly exaggerating their cases.

"In essence, Harry, by releasing ‘Apocalypse Now,’ caused a run on the bank and destroyed trust in William," Radcliffe says. "I understand, to an extent, what Harry did but I think with hindsight it worsened the financial outlook for the creditors considerably."

Radcliffe admits that Baekeland should harbor some of the blame for the issue. When the news broke, Radcliffe wrote an email to Baekeland’s various accusers, acknowledging their outrage. "I will probably never really understand why [Baekeland] did this, why he took a skill and viable business organizing trips and ruined it for the sake of ego and greed."

Landing with a small airplane, Düne Insel, Helgoland

A post shared by William Baekeland (@williambaekeland) on Feb 10, 2017 at 5:11pm PST

But now he likens the travelers to a melodramatic mob.

Referencing negative posts Dominique Laurent wrote on TripAdvisor, Radcliffe calls him "a particularly irascible and unreasonable Frenchman." He disputes many of Laurent’s claims of being ripped off, arguing that he only paid deposits for trips and not the full amount. Radcliffe also says he’s offered to carry out some of Baekeland’s canceled trips, but all travelers have declined.

Many of Baekeland’s aggrieved former travel companions have filed complaints against him in several countries across Europe, although most have received little indication that law enforcement is moving quickly to bring charges.

Laurent, who filed a complaint with authorities in France, Ireland and the United Kingdom, says the process "looks very slow." Bob Bonifas is hopeful of recovering his damages in Ireland, since Baekeland’s bank accounts were located there. The Irish Garda declined to comment for this story, but Bonifas suspects "it has taken some action in freezing William’s bank account and line of credit."

The City of London Police confirmed two reports about Baekeland have been received by Action Fraud, the UK’s cybercrime and fraud reporting agency. The claims are "currently being assessed," per a spokesperson.

Radcliffe and Baekeland incorporated Atlas Travel and Expeditions last July. In November of last year, the same month that allegations of his grifting emerged, Baekeland was removed from the company’s list of shareholders.

Radcliffe maintains that Atlas Travel is a credible organization, and that Baekeland is no longer involved at all. The company hasn’t carried out any trips as of yet, but Baekeland says it has received significant interest from travelers in Japan.

Despite Baekeland’s removal, Bonifas is sure Atlas Travel is nothing but a conduit for more of the same. "They’ve set this second company up to be bulletproof" in what Bonifas calls a "scam." Atlas Travel’s website, which promises scheduled tours and "bespoke travel" to distant hinterlands across the globe, comes riddled with byzantine fine print and a long-winded terms and conditions section hammered out over 17 bullet points.

Currently, it’s open for business. 

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16May 2018

Why the Credit-Card Boom May Have Just Peaked – WSJ – Wall Street Journal


Credit cards remain highly lucrative for banks, but rising loan losses and increased rewards expenses are adding pressure to returns.


Photo:

Elise Amendola/Associated Press

Following some of their strongest years ever, credit-card issuers are grappling with an uneasy future.

Rising loan losses and increased rewards expenses are putting pressure on card lenders’ returns. The result is that one of the most profitable consumer-lending categories in recent years may become more of a middling player.

“The easy money has been made in card lending,” said

Don Fandetti,

consumer finance analyst at Wells Fargo & Co.

While cards remain highly lucrative for banks, the benefits of a rising interest-rate environment have been muted lately. The added revenue of cardholders paying more in interest payments each month has also been offset by growing competition from lenders trying to poach card customers by offering lower rates.

Credit cards became an appealing loan category for banks in the wake of the last recession. Card balances grew at an accelerating pace in recent years, reaching a 7% year-over-year growth rate early last year. Total balances exceeded $1.03 trillion in January, the highest on record, according to the Federal Reserve.

But that coincided with an increase in loan losses from historically low levels, as banks set aside more money for future write-offs. They also tightened their underwriting standards, resulting in slowing growth. Card-balance growth in March was up 4.8% from a year earlier, compared with a 6.1% increase in March 2017 from the year-earlier period.

Five of the largest credit-card issuers—

American Express
Co.


AXP -0.15%

,

Capital One Financial
Corp.


COF 1.16%

,

Citigroup
Inc.,


C -1.00%

Discover Financial Services


DFS 1.47%

and

Synchrony Financial


SYF 1.11%

—generated a median return of 2.1% on their assets for common shareholders in the first quarter, up from 2% a year earlier but down from 2.6% two years prior, according to analysis by Autonomous Research. The recent peak was 3.7% in the second quarter of 2011, according to an industry analysis by Autonomous at the time.

“The industry was at an unsustainable high…so coming down is expected,”

David Nelms,

Discover’s chief executive, said in an interview.

The pickup in returns for most banks in the first quarter was primarily the result of tighter underwriting, which helped slow the rate of loan loss increases and the amount of money banks are setting aside for future losses. U.S. tax-law changes that lowered corporate tax rates also helped.

Related

  • Former Citigroup CEO Vikram Pandit Makes $100 Million Investment in Credit-Card Startup (May 14)
  • Goldman Sachs, Apple Team Up on New Credit Card (May 10)
  • Heard on the Street: Consumer Credit May Weigh on Economy (April 9)

Still, returns remain largely unchanged—and in some cases down—from about 2½ years ago when the Fed began raising rates. “Rising rates [are] a mixed blessing for the card issuers at this point,” said

Brian Foran,

analyst at Autonomous Research. Companies aren’t getting the full benefit of the higher rates because while interest charges on cards are rising, so are the interest rates card issuers are having to pay bank customers for their online deposit accounts.

Some analysts predict that profitability will keep falling, though it remains significantly higher than many other banking products. Credit cards delivered a projected 3.8% return on assets to 14 large banks highly concentrated in the card business last year, compared with an overall 1.35% projected return for all commercial banks, according to payments consulting firm Mercator Advisory Group Inc. Mercator projects that card returns will fall in 2018 to 3.5% due to losses and challenges cutting further costs.

Stocks of card companies have reflected the concern, with Discover shares down 0.8% so far this year, and Synchrony Financial, the largest U.S. store credit-card issuer, down 11.4%, compared with a 4% gain in the KBW Nasdaq Bank index.

Credit-card losses have been mostly rising over the past two years after hovering around near-record lows. The average net charge-off rate—the share of outstanding debt that issuers wrote off as a loss—for eight of the largest credit-card issuers reached a nearly five-year high of 3.46% in the first quarter, according to Fitch Ratings. The increases have become worrisome indicators for some shareholders of consumers’ inability to pay debts at a time when unemployment is low. 

Another pain point for card issuers is the cost they incur from so-called gamers, who search for the highest rewards on their cards. These consumers sign up for credit cards with rich sign-up bonus offerings and then stop using the card once they have tapped out the early rewards.

U.S. credit-card attrition rates, a measure of how many cards consumers and card issuers close, reached 15% in 2017, up from less than 10% a year earlier, according to Mercator.

Meanwhile, banks and fintech lenders that originate personal loans have been increasing solicitations in recent quarters. Many of these offers are targeting consumers with credit-card debt and pitching the opportunity to roll over that debt into a personal loan at a lower interest rate. Their prime targets are the customers who card issuers want to keep most: those with high credit scores who carry a card balance each month.

A record 516 million personal loan solicitations were mailed out in the first quarter, up 46% from a year ago, according to estimates from market research firm Competiscan. This marked the fifth-consecutive record-breaking quarter.

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16May 2018

Want a free flight? These airlines give frequent flyers the best shot – CNBC


Ready to cash in some of your frequent-flyer miles? You’re in luck.

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The chance of getting an award seat has improved from several years ago.

Availability is now about 74 percent, according to the CarTrawler Reward Seat Availability Survey, which was released Wednesday. Eight years ago, award tickets were available 66 percent of the time, and 71 percent by 2013.

“Five years ago it was a pretty ugly sight,” said Jay Sorensen, president of IdeaWorks Company, which conducted the study for CarTrawler.

Airlines want loyal customers so it is in their interest to make award seats more available, Sorensen said.

Airlines also generate revenue from selling frequent-flyer miles to banks when customers with co-branded or rewards credit cards use those cards, another reason for keeping those travelers happy, spending and returning to the airline.

Major airlines have made it more difficult for many travelers to earn miles by flying. Instead of the old model of rewarding travelers for how far they fly, they now reward them based on how much they pay for their tickets.

Southwest Airlines topped the list of 25 airlines in the survey, with 100 percent availability for the lowest-price award tickets.

Some airlines made big improvements. American Airlines AAdvantage program rose nearly 28 points from a year earlier, with seats for the lowest available award price available 82 percent of the time, ranking it ninth. Low-cost airlines scored better than traditional carriers overall.

For award tickets for long-haul flights — those longer than 2,500 miles — Turkish Airlines’ Miles&Smiles program came in first with 98.6 percent availability, followed by Air Canada’s Aeroplan and Norwegian Air Shuttle’s Norwegian Reward.

The survey was based on 7,420 booking and fare queries.

Here is the complete list:

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16May 2018

Disney Credit Card Review: Mickey Mouse Rewards – NerdWallet (blog)


Editor’s rating: 3.3/5 

If the House of Mouse is your happy place, you may be thinking about getting a Disney-branded rewards credit card. Disney cards come in two flavors: the no-fee Disney Rewards® Visa® Card and Disney’s Premier Visa® Card, which has an annual fee of $49 and throws in some additional perks for the price.

Neither version of the card deserves top-of-wallet status, however. Anyone seeking a FastPass to savings is more likely to benefit from a card with a rewards structure that can put more Mickeys in your pocket than the lackluster earnings of these cards.

Disney credit cards: Basics and benefits

The two cards at a glance:

On both cards, your rewards come in the form of Disney Reward Dollars. They can be redeemed toward Disney theme park visits, Disney cruises, Disney and “Star Wars” movies, and shopping at Disney’s online and brick-and-mortar stores. If you have Disney’s Premier Visa® Card, you can also redeem rewards for a statement credit toward airline travel.

Both cards charge a foreign transaction fee of 3% (keep that in mind if you’re headed to Disneyland Paris). As of May 2018, the ongoing APR on each card was 17.49%.

Where the Disney credit cards shine

Exclusive cardmember benefits

Holders of either card get access (for themselves and up to five additional people) to exclusive Disney and “Star Wars” character meet-and-greets at Disneyland and Walt Disney World. If you’re the kind of person who cherishes magical moments like these, this perk might be reason enough to carry a Disney card. Outside of the parks, you can also get invitations to events at your nearest Disney store.

Discounts and savings

The cards also offer discounts, which can be notoriously hard to come by at the Happiest Place on Earth. Cardholders save 10% on select merchandise purchases of $50 or more at select locations within the resorts and also 10% off select merchandise at Disney Store locations and shopDisney.com. Select dining locations within the parks also offer 10% off when you use your card, but it should be noted that there are blackout days when that discount isn’t available.

The cards get you a juicy 15% off select guided tour and recreation experiences at Disneyland and Walt Disney World. The savings here can be significant. For example, a one-day Ultimate Day of Thrills VIP Tour can cost up to $349 per person before tax, which means cardholders would save about $52.

0% Intro APR offer

Finally, if you don’t want to have to pay for your entire vacation all at once, the cards come with an intro 0% APR offer good for six months after each time you buy a qualified Disney resort package, cruise or vacation-ownership package. That’s six months of breathing room to whittle down a bill that’s likely to be several thousand dollars.

Where the Disney cards fall short

Less-than-stellar rewards rates

Depending on how you spend, you could probably save more overall with a cash-back card that offers a flat rate in all areas of spending. The 1% earnings rate of the Disney Rewards® Visa® Card just seems, well, goofy compared with no-fee cash-back cards that have higher earning potential, like the Citi® Double Cash Card – 18 month BT offer which gives you 1% back when you spend and another 1% when you pay the bill. And a whole slew of cards offer 1.5% cash back on everything.

The Premier version of the card offers slightly better value, as it earns 2%  at gas stations, grocery stores, restaurants and most Disney locations. All other spending earns 1%. With Disney’s Premier Visa® Card, you can also use your rewards as a statement credit toward airline travel, which might make the overall cost of your vacation a bit easier to swallow. Redemptions start at 50 Disney Reward Dollars for a $50 airline statement credit. Keep in mind that you’d have to spend at least $2,450 per year in the 2% categories on the Premier to break even on the annual fee.

Inflexible rewards

With Disney’s Premier Visa® Card and the Disney Rewards® Visa® Card, your earnings can be used only on qualified Disney or “Star Wars” spending or,  in the case of Disney’s Premier Visa® Card, as a statement credit toward airfare. You might find it much easier to just earn cash back to spend any way you like or earn general travel rewards to book your hotel, flight or cruise. The Capital One® Venture® Rewards Credit Card, for example, gives you 2 miles per dollar spent on anything; miles can be redeemed for credit against any travel expense at a rate of 1 cent apiece. It comes with a substantial sign-up offer: Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel. The annual fee is $0 for the first year, then $95.

Disney Reward Dollars also expire after five years, which means if you were hoping to accumulate a stash of points over time to pay for a once-in-a-lifetime Disney trip, you’d better make sure you do it within that time frame.

Clunky redemption

The process of redeeming rewards is cumbersome. Once you’ve accumulated a minimum of 20 Disney Reward Dollars, you can contact Chase and order a Disney Rewards Redemption Card, which functions similarly to a prepaid card but can be used only on qualifying purchases. You can either wait for the card to be mailed to you or pick it up from Guest Relations at a Disney theme park. You need to have earned at least 10 Rewards Dollars to reload the card.

Is a Disney credit card right for you?

For anyone who spends or plans to spend a big chunk of money on a Disney trip, or for frequent park hoppers, these Disney cards could provide solid savings and benefits. Someone who has an annual park pass or takes a Disney cruise every year, for example, may find that the discounts and perks are worthwhile.

But if a visit to Mickey and friends is more of a once-in-a-lifetime thing and you rarely buy the merch, a general-purpose cash-back or travel rewards card is likely to provide more value.

Information about the Disney’s Premier Visa® Card and the Disney Rewards® Visa® Card has been collected by NerdWallet and has not been provided or reviewed by the issuer of these cards.

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16May 2018

FlixBus comes to the US to Uber-ify interstate travel – CNET


Bus travel isn’t the most glamorous method of traveling the United States, but FlixBus thinks it might be able to bust through that barrier.

FlixBus wants to inject a dose of Uber into interstate bus travel. Instead of operating its own fleets, FlixBus is a middleman working with both passengers and independent transportation companies. FlixBus will work with six bus lines in the US to start: Arrow Stage Lines, American Explorer Motorcoach, Gray Line Arizona, Pacific Coachways, Transportation Charter Services and USA Coach Services.

That livery is bright.


FlixBus

No matter the operator, FlixBus will outfit its buses with a can’t-miss-it combination of orange and green. All buses will have free Wi-Fi in addition to “onboard entertainment,” power outlets and USB ports for every seat. While the operators still own the buses, FlixBus will be in charge of setting routes and pricing, in addition to running its app. According to The Drive, it takes about 30 percent of the revenue, with the remainder going to the bus companies.

Its initial focus will cover approximately 180 city combinations in the Southwest and California. A number of FlixBus’ examples focus on travel to and from Las Vegas, with starting points ranging from Los Angeles to Phoenix to San Diego. Eventually, FlixBus wants to expand its footprint to cover approximately 400 connections.

Pricing is flexible, like Uber or Lyft, and it will shift based on demand. However, its initial offerings are ridiculously cheap — like, 99 cents from UCLA to Caesar’s Palace cheap. FlixBus’ co-founder told The Drive that it wants to be competitive with all manner of transportation, not just other buses.

The company didn’t just spring up from nothing. FlixBus got its start in Europe, where it currently has some 300 partners, and it hopes to recreate that success Stateside starting this month. But then again, Europe actually embraces wheeled mass transit, so it’s anybody’s guess as to how this will pan out.

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16May 2018

Ikea launches a new credit card – CNN Money – CNNMoney


Watch this robot assemble an IKEA chair in minutes

Sure, credit cards that reward dining and hotels are great — if you’re a person who travels or eats out a lot.

But for the many people who spend more time at home, Ikea is betting you want rewards, too.

The furniture and housewares store is launching a new Ikea Visa card that offers store rewards and perks.

Designed to help make Ikea shopping more affordable, cardholders earn rewards on their Ikea purchases and everyday spending such as utilities, gas and groceries, that they put toward purchasing Ikea products. The card has no fees or deferred interest.

The card offers 5% back on every Ikea purchase, including its Task Rabbit construction and installation service; 3% back on all dining, grocery and utilities purchases (including cell phone, electric, and radio and streaming subscriptions like Hulu, Netflix, Spotify and Sirius/XM); and 1% back on all other purchases.

The credit card comes with a single interest rate — 21.99% — for everyone.

“We want to create a better everyday life for many people,” said Jacqueline DeChamps, chief operating officer at Ikea US. “If they have a connection with us, they can realize solutions for their home faster with the rewards and can also build credit.”

Related: Changes are coming to balance transfer credit cards

The Ikea Visa Credit Card is part of a new program in partnership with Alliance Data’s card services to design financing products for customers. Earlier this year Ikea launched the Ikea Projekt Card, which offers store-branded financing for people starting major home decorating or renovation projects.

The Ikea Visa builds on the store’s standing loyalty program, Ikea Family. Cardmembers earn those perks as well, including monthly product discounts, food discounts and 90-day price protection, which ensures you’ll get a refund of the difference if a product you purchase goes on sale for less within 90 days.

New card members also get $25 off their first Ikea purchase and $25 in Ikea rewards once the user has spent $500 on the card on qualified non-Ikea purchases within the first 90 days of opening it. For a limited time, they’ll also get free standard shipping and delivery on in-store purchases.

Update: An earlier version of this story said that the Ikea Visa card would offer free shipping on in-store purchases, and that the $25 discount for new members would last through August. Ikea now says that the free shipping offer lasts until August, while the $25 discount is ongoing for new cardmembers.

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15May 2018

The real reason Qantas and Virgin want you in their frequent flyer clubs – The New Daily


If you are a member of Qantas or Virgin Australia’s frequent flyer programs, you’d better make sure you’re getting your money’s worth.

Because if you’re not, then you are essentially giving away for free what is quickly becoming the world’s most valuable commodity: your data. And the airlines are making a mint out of it.

Qantas Frequent Flyer and Virgin Velocity are not, as is commonly thought, loyalty programs. Much like Coles flybuys, they are essentially data-gathering schemes which collect your personal spending habits, and market that data to third parties.

The profits of these businesses are huge. Take Qantas. Last year its frequent flyer program brought in profits of $369 million. That was more than the profits derived from international flights.

But the really telling figure is the profit margins. Qantas’ frequent flyer program’s profit margin is consistently far above any of the airline’s other operations.

Last year, the domestic flights business brought in a profit of $645 million out of a revenue of $5.63 billion. That’s a profit margin of 11.5 per cent.

The frequent flyer program’s profit margin, meanwhile, was more than twice that at 24.5 per cent.

The story is even more extreme for Virgin Australia, whose frequent flyer program Velocity is the most profitable segment of the business by far.

Last year Virgin Australia’s domestic flight business brought in a profit of $92.9 million, with a profit margin of a paltry 2.7 per cent.

Virgin’s Velocity program, meanwhile, brought in a profit of $142.8 million, with a profit margin of an astonishing 38.5 per cent.

How do they make their money?

These are impressive figures for a business that has no obvious form of revenue. So how do frequent flyer programs make money?

The New Daily put that question to both Qantas and Virgin Australia. Neither gave direct answers, pointing instead to already published documents.

A close reading of these documents appears to reveal that ‘partners’ of the programs – that is, external companies like BP or ANZ – pay Qantas or Virgin for the right to confer frequent flyer points to their customers.

The money that Virgin or Qantas receives for that is offset against the cost of running the program and of giving members their rewards – free flights, hotels etc – and the leftover cash is counted as profit. And clearly there is plenty of leftover cash.

The next question, then, is why these businesses are willing to pay a premium for the right to give out frequent flyer points.

An obvious answer might simply be ‘because it gets customers in the door’. But that isn’t it.

Actually, it’s all about data. The following paragraph from Virgin Velocity’s data policy says it all, and is worth quoting in full. It’s the kind of boring fine print we’ve all skim-read a thousand times, before ticking ‘accept’. But hidden within it is a fascinating business practice that is gaining importance by the day:

“The purposes for which we collect your personal information include … developing insights about you so that we can better understand your preferences and interests. We do this to identify products, services, membership benefits and rewards offered by us, our related entities, Airline Partners, Program Partners and third parties that may be of interest to you. We also do this to personalise your experience and enhance those products and services offered by us, our related entities and our Program Partners. We may also use trusted service providers to undertake the process of developing these insights.”

Qantas Frequent Flyer has an astonishing 11.8 million members – almost half the population of Australia. Virgin Velocity isn’t far behind, with more than 8 million. In other words, the majority of adult Australians are members of one of these two programs.

So it’s no wonder businesses are more than willing to pay Qantas or Virgin to be ‘partners’ in these programs – it plugs them straight into a matrix of data about millions of potential customers.

The value of data cannot be overstated

It is no exaggeration to say consumer data is becoming the world’s most valuable commodity.

Three of the six most valuable companies in the world – Google, Amazon and Facebook – are built on consumer data. Amazon is thrashing other retailers because it knows exactly what you want to buy. It knows that because it’s tracking what you look at and buy and recording all that data.

This wealth of customer data is allowing Amazon to grow into something like an online retail monopoly.

Likewise, Google and Facebook are almost singlehandedly destroying other ad revenue-dependent media companies because, thanks to all the data they have on you, they can target ads much more effectively than more traditional media outlets, like newspapers and TV networks.

Businesses know exactly how valuable their customers’ data is, which is why so many are constantly trying to get you to join their ‘loyalty programs’, which are not loyalty programs at all but data-gathering programs.

Steve Worthington, a professor at Swinburne University who has written extensively on data gathering, said on a basic level these programs do appear to give consumers “something for nothing”.

However, he said so far the public doesn’t fully understand the nature of the transaction.

“We don’t yet really comprehend how much data is being gathered about us by businesses. The rewards we get are minuscule compared with the value we are giving away.”

So is there anything to worry about? Alongside the sort of data breaches exemplified by the Facebook-Cambridge Analytica scandal, Dr Worthington said the biggest danger was identity theft.

But as long as the data was not subject to breaches, he said consumers did not generally consider data gathering an infringement. But he pointed out it was very early days.

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15May 2018

Samsung: Cash Back And Rewards Deliver Omnichannel Value To Consumers – PYMNTS.com


The traditional piggy bank may have outlived its usefulness in economies that are less and less cash-based, but that doesn’t mean it’s time to retire the concept entirely. It’s just time to introduce consumers to its digital counterpart — a virtual piggy bank where, instead of collecting spare change, consumers can collect their cash back and rewards all in a single place.

Nana Murugesan, vice president and general manager at Samsung Electronics America, said this is what Samsung has been building up to in recent years, continually tucking new value-add features into its ecosystem.

The most recent feature weaves Samsung Rewards into Samsung Pay in a way that gives users reward points every time they use the mobile payment service, no matter what the customer is buying, where they’re doing business or how they’re paying for it.

Those points accrue in the user’s Samsung Pay wallet, incentivizing them to use the digital wallet again next time to leverage those funds. The more that consumers interact across Samsung’s ecosystem, the more change they get to throw into that digital piggy bank.

Samsung Rewards launched in November 2016 along with Samsung Pay to help customers derive more value from the service. The vision for Samsung Rewards has always been to scale by giving users more opportunity to engage with a wide range of experiences across channels.

There’s Samsung Pay, Samsung Health and Samsung Internet. There’s Bixby, Samsung’s intelligence platform, and various experiences within the Bixby bucket, from Bixby Home to voice and visual shopping via augmented reality (AR) capabilities on Samsung phones’ native camera app. The Korean tech giant has tens of millions of users across these services.

In a recent interview with Karen Webster, Murugesan and Sang Ahn, VP & GM, Samsung Pay, shared how the feature will enable new experiences to cement and grow consumer usage, while also benefitting merchants who opt to accept Samsung Pay and participate in Rewards.

The Challenge of the Bridge Millennial

There are certain categories in which shoppers prefer to touch and feel products before they buy. Apparel and jewelry can be difficult to sell online for this reason. It’s common for customers to do their research on the web or mobile channel, then head to a store to get the tactile information they need to make a purchase decision.

Yet, oddly enough, many consumers go to the store and then still make a purchase online. This is a major habit among who Webster refers to as “bridge millennials,” consumers between 30 and 40 years old who are on the older end of the millennial generation and/or the younger end of Gen X.

Bridge millennials have careers and disposable income. They are paying off, or have paid off, their student loans. Many are married and starting families. They are more established in spending.

Most importantly, said Ahn, they are the first generation of connected consumers who have grown up using mobile as a tool for how they shop — and not just as a way to pay for things online, but as a method for product discovery and research.

When bridge millennials and other shoppers use brick-and-mortar retail to round out their research, but not to make purchases, merchants lose the opportunity to make a sale to a customer who has taken the time to walk through their doors.

Rewarding Shoppers AND Merchants

Ahn said that cash back and rewards can help connect the shopping experience to payments and tie the in-store experience to what consumers could find online.

When Samsung introduced cash back, the idea was to use the tech giant’s many channels and large, at-scale services to make shopping better for consumers, which Ahn said can also drive benefits for those physical merchants who enhance their foot traffic with online sales opportunities.

“We have a chance to give consumers a benefit,” Ahn said. “Anytime they enter through our Samsung touchpoints and complete a mobile transaction, we have a chance to give them a distinct benefit: a cash back reward, plus Samsung Rewards if they are using Samsung Pay. There is a distinct reason to shop with us if you’re on our platform.”

Ahn said the cash back program is live with select merchants, enabling those merchants to offer their own cash back rewards to entice consumers to complete purchasing activity in-store. It is separate from Samsung Rewards and from points or rewards offered by credit cards stored in the Samsung Pay wallet, although these components can stack to deliver even greater benefits to the consumer.

Once value is stored in the Samsung Pay wallet, Ahn said, it drives further action and encourages the customer to use Samsung Pay again.

Murugesan added that consumers are already able to get deals from merchants, but the process for accessing those deals can be fragmented. He said that’s why Samsung saw an opportunity to centralize everything and put all the cash back in one place — a single digital piggy bank that simplifies how the market already works and what it already offers, rather than innovating something completely new.

What’s Next

Merchants, said Murugesan, want to drive traffic and introduce new channels that they aren’t already using. They want distinctive ways to communicate with consumers.

Samsung, as a tech company, has the potential to give them that, he said, so the company is working to position itself as a win for the entire ecosystem, including both merchants and consumers. It aims to grow its cash back program to more merchants in the next several months.

In addition, by the end of May, customers will have the option to buy points within Samsung Rewards to round out rewards purchases they wish to make but are just short of earning. Murugesan said this is a common demand and has been introduced already by various other loyalty programs.

“We want our consumers to know that Samsung is the most rewarding place to shop,” Ahn summarized.

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