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Target Testing New REDPerks Rewards Program

MINNEAPOLIS (WCCO) -- Target is testing a new way to reward its customers.

It's in the form of a mobile app that keeps track of how much money you spend.

The program is called REDPerks and right now it's only being offered to select shoppers in Raleigh-Durham, North Carolina.

Shoppers earn points for every dollar they spend.

When they reach 5,000 points, which equals $500, they'll receive a coupon through a mobile phone app for 5 percent off everything they buy on a single shopping day.

First of all, this new rewards program is in addition to the 5 percent discount that Target REDcard holders get and most other coupons offer.

It is only valid for for in-store purchases, not online sales.

And in this testing phase, Target says it will be studying how it goes and then determine whether to expand it, modify it or abandon it.

If you're already a regular shopper at Target, this new rewards program might make you an even more loyal customer.

"It's going to give you another reason to buy the items that you could buy elsewhere, to buy there," said Jon Seltzer, a marketing professor at the University of St. Thomas.

He says with this new app, shoppers will get a discount and Target will get something too.

"Think about the information set it is creating for the retailer, telling them what you are buying and when you are buying. And it can be very useful for a retailer to know what promotions you respond to as opposed to somebody else," Seltzer said.

He likes the idea of offering the 5 percent discount to almost all items across an entire day.

"Think about it, how many times have you said, 'That's a great discount, but it's on an item I don't want.' You give me 5 percent of something I buy anyway, like milk or eggs, that might be very attractive," he said.

Seltzer thinks we'll see more stores offering new and creative rewards.

"The discount they give you is not as great as the positive impact of profitability of more volume," he said.

Target said it will also use the app to test other surprise perks.

Shoppers in Minnesota, like Dan Lemke,  voiced their opinion of the new rewards program.

"It's nice to get a discount any time, and when you shop so much at Target, it's great that they are giving back the way they do," said Lemke, who already has a Target REDcard.

Jessica Rau said she shops at Target frequently.

"I spend a lot of money in there already, but I would definitely use something like that," she said. "I think it's a good idea."

So here's what's happening at those North Carolina stores, where they started testing the new app last month.

Like Cartwheel, the REDperks app includes a barcode.

So you just have the cashier scan that barcode on your phone at checkout, and when you reach the 5,000 points, you will receive that coupon.

When could we see this offered here in Minnesota?

A Target spokesperson emphasized that at this time, the company is very much in a test-and-learn mode, and have no plans to expand the program to additional markets.

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