‘Lotte Card at Lotte Department Store’ Official Rules to Be Broken… Hyundai Card Challenges

The unwritten rule of ‘Lotte Department Store = Lotte Card’ has been broken. Lotte Department Store, which insisted on using only Lotte Card as a department store-exclusive credit card, recently joined hands with Hyundai Card. Attention is being paid to whether there will be changes in the business methods of Lotte Card, which has maintained its position as a sole business operator.

Hyundai Card recently released two Lotte Department Store cards: the ‘Silver Lotte Department Store Card’ with an annual fee of 30,000 won and the ‘Gold Lotte Department Store Card’, a premium card with an annual fee of 150,000 won.

Lotte Department Store’s second partner is Hyundai Card

This is the first time that Lotte Department Store has released a dedicated credit card from a card company other than Lotte Card, drawing attention. Hyundai Card cited the following as the background for this collaboration: △data science-based marketing, △differentiated branding, and △support for young consumers through Apple Pay.

Hyundai Card said, “We have become the first credit card diversification partner for Lotte Department Store, which has previously used only a single credit card brand,” and “We plan to work to strengthen Lotte Department Store’s online and offline competitiveness and expand its young premium customer base.”

There were many cards that provided benefits such as points and discounts when shopping at Lotte Department Store, but Lotte Card was the only exclusive affiliate card that provided department store discount coupons. Although it was separated from Lotte Group in 2019 and had no direct connection with Lotte Department Store, Lotte Shopping still holds a 20% stake. The fact that they have issued a single affiliate card up to now is proof of their strong relationship.

This exclusive position could be broken as Hyundai Card becomes Lotte Department Store’s new partner. In the case of Lotte Card, it is highly likely that it will affect recruitment and sales performance based on Lotte Department Store. This is why there are concerns about Lotte Card.

A card industry insider said, “Most of Lotte Department Store’s loyal customers will have Lotte Card,” and added, “They will likely carry out aggressive marketing since it is just starting out, but preventing existing customers from leaving will be key.”

Will it just be one of many PLCCs?

The benefits of Lotte Card and Hyundai Card are broadly similar. They provide a portion of the usage amount as savings or discounts based on the previous month’s performance, as well as discount coupons and interest-free installments.

Based on the Silver Lotte Department Store Card, Hyundai Card accumulates 5% of the amount spent online at Lotte Department Store, Lotte Outlet, Lotte Mall, and Lotte Department Store Mall, up to a limit of 20,000 points (M Points) per month. Lotte Department Store offers 6 months of interest-free savings, and provides 3 5% Enuri coupons per month. To receive the benefit, the previous month’s usage amount must be over 500,000 won.

Lotte Card’s Lotte Department Store Card has greater benefits with a 15% billing discount. The discount limit is 20,000 won for purchases over 300,000 won and 30,000 won for purchases over 500,000 won. 5% discount coupons are provided two per month when the accumulated purchase amount for the previous 6 months is 300,000 won or more. Installment service is available for up to 12 months, and if the purchase amount is 300,000 won or more, the fee for that month is waived.

Of course, this is not the first time that card companies have collaborated outside of their groups. Through the ‘PLCC (Private Label Card)’, Hana Card launched the ‘Toss Bank Credit Card Wide’ earlier this month, and Shinhan Card signed an agreement with Kakao Bank and plans to launch a credit card within the first half of next year. Some observers say that these cases could end up as simple expansions of cooperation.

Another card industry insider said, “It’s not that there was no dedicated card, but most credit cards already include discounts and rewards from other department stores, including Lotte Department Store,” adding, “This isn’t something new, as the card industry as a whole is diversifying its business.”