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Montgomery Ward credit card customers are finding a surprise in their mailboxes: a Wal-Mart credit card to replace their Wards card.

Wal-Mart Stores Inc. last week began mailing new credit cards to 5 million of soon-to-be-defunct Wards' 8 million credit card customers, in an ambitious effort to gain new customers. The mailings will continue through April, said Wal-Mart spokesman Tom Williams.

"We reviewed the customer demographics, the geographics and product overlaps of the retailers as well as the spending behavior of our Ward cardholders and found that a huge majority of them were already Wal-Mart shoppers," said Marcy Brucellaria, a spokeswoman for Stamford, Conn.-based GE Capital, which owns both the Wards and Wal- Mart credit card portfolios. "Wal-Mart was the best fit."

Wal-Mart will appeal to many Wards customers, who are typically middle- to lower-income, said Neil Stern, partner with McMillan & Doolittle, a Chicago retailing consulting firm.

"Wal-Mart's bread and butter is middle America," he said. As for Wal-Mart stepping in, "this is the buzzard swooping down and picking up the remains."

One former Wards shopper is not happy.

"I've never been to a Wal-Mart store and never plan on going to a Wal-Mart store," said Kathy Posner, president of a Chicago public relations and advertising firm. "I didn't ask for it and now I have to go through the trouble of canceling the card and make sure it's not on my credit report."

General Electric Corp.-owned Montgomery Ward shocked shoppers and investors alike when, on Dec. 28, the 128-year-old retailer announced it was closing forever, laying off 37,000 workers and filing for bankruptcy. Its last remaining stores will close at month's end. Competitors such as Target and Kohl's have already announced intentions to buy some of Wards' store locations.

For Wal-Mart, the move is another way to grow the nation's largest retailer's market share.

"We like customers," Williams said. "We're always enticing people to our stores."

Swapping one card for another isn't totally unusual, said Robert McKinley, chief executive officer of CardWeb.com Inc., a research firm. But "it is unusual for a company to issue cards to the cardholders of another bankrupt company. However, given the high cost of generating new accounts, this may be a smart move."

Customers who receive Wal-Mart cards simply must sign the backs of the cards to use them. Wal-Mart is even offering a teaser to lure new customers: a $10 account credit to new customers who buy something at Wal-Mart before April 30.

Also, the new Wal-Mart customers will be able to use their cards at Thrifty Rent-A-Car, which previously accepted Wards cards. Customers with balances on Wards cards will see those carried over onto their Wal-Mart cards.

For customers who don't want the Wal-Mart card, they can simply cancel their accounts and cut up the cards, a spokesman said.

Because GE Capital owns both the Ward and Wal-Mart credit card portfolios, there was no sale of assets, Brucellaria said.

Typically credit card issuers cannot send an unsolicited credit card to a potential card customer, only invitations to apply or "pre- approved" applications. The Wal-Mart deal is different, Brucellaria said, because the Wal-Mart card is "considered a replacement card" for the Wards card.

# posted by Medical Information : 4:20 AM