NEW YORK (AP) — Wal-Mart has a new program that offers prizes as incentives to get its legion of shoppers to sock away money in saving accounts.
The “Prize Savings” program features Wal-Mart’s branded reloadable pre-paid debit cards, which are linked to a free savings “vault.” Savers are given one entry into a monthly prize drawing for every dollar they stash in the vault.
The sweepstakes will award 500 cash prizes every month, with the average prize being about $25. The monthly sweepstakes includes one $1,000 grand prize.
Wal-Mart says the program, launched in without fanfare in August, is the first national and retail prize-linked savings program. It’s also a way to encourage saving by its low-income shoppers, many of whom might not have enough saved to cover even the smallest emergencies, like fixing a flat tire.
The move underscores how the world’s largest retailer is expanding its financial services, which already includes check cashing and money transfers.
Savings programs tied to prizes are becoming more widely available in the U.S. with the enactment of the American Savings Promotion Act, which became law in December 2014. That removed all federal regulatory barriers to banks and thrifts offering prize-linked savings programs.
With Wal-Mart’s program, users log into their MoneyCard app or website to transfer money from their balance into the separate MoneyCard Vault, a free savings feature. The program is in partnership with Green Dot Corp., which is the issuing bank for Wal-Mart’s prepaid cards. They enlisted Commonwealth, a national organization that uses innovative ways to encourage people to save through programs like prize-linked savings.
Executives with Wal-Mart Stores Inc., which is based in Bentonville, Arkansas, told reporters Thursday that the “Prize Savings” program is already enticing customers to save more. When the program first started, the average customer savings balance was $413. Now, that figure is $572, a 35 percent increase.