Why Do Banks Offer Better Bonuses In Branch?

Chase just announced that the sign up bonus on the Chase Sapphire Reserve would be decreasing on January 12th for online applications, but the bonus will be staying at 100,000 points if you apply in branch. Citi also does and so do a lot of other financial institutions.

I thought it might be useful to explain why a bank/credit union/card issuer might decide to offer a higher bonus in branch than online. There are three main reasons I know of:

  • Inability to process online applications. Obviously this doesn’t apply to companies such as Chase, but smaller credit unions might not have the resources/software (or want to pay the fees to license such software) needed to process applications online so they simply don’t offer online applications. This is especially common when it comes to bank account bonuses.
  • Lower marketing costs. When an application is made in a physical branch, the financial institution doesn’t have to pay any referral/affiliate fees. When an application is made online, they often need to pay the website/person who referred the person making the application. These fees can range from $25-$500+ so significant savings can be made here. Obviously branches still have costs associated with them, but the majority of these costs are fixed (e.g building itself, maintenance etc) rather than variable (e.g affiliate fees). Keep in mind we don’t use credit card affiliate links, this why we have no incentive not to tell you about higher in branch offers.
  • Increase products per customer. Financial institutions are obsessed with customers having multiple products, they want their financial institution to be a consumers hub where they hold their credit card, deposit accounts and any loan products. Wells Fargo got into trouble for creating fake accounts and that all came about due to financial incentives that branch employees received for signing customers up for accounts (and minimum sign up requirements as well). Enticing a customer into a branch gives branch employees an opportunity to build a relationship with new customers & recommend other products. It also displays the fact that they have a physical presence in the area (competitive advantage against online only financial institutions)

Chase & other financial institutions believe that by offering an in branch bonus that they can lower their variable costs and increase the average amount of accounts each customer has. There is a real obsession with accounts per customer at the moment in the banking industry (and there has been for a long time). I’m not personally convinced that these types of offers actually help drive additional account openings of profitable customers. I’ve heard anecdotally from personal bankers that a lot of the time they don’t like when offers are split this way as savvy customers (such as Doctor of Credit readers) are more likely to open that single account and leave.

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jml7
jml7 (@guest_334309)
January 5, 2017 09:34

It’s the same reason why they are willing to take a loss on free checking accounts – once you get in the habit of popping into the branch for stuff, you’re more likely to get a mortgage with them. And mortgages are where banks make most of their money.

Jason
Jason (@guest_334024)
January 4, 2017 16:39

I see another major reason is that to avoid fraud/fake application/stolen of personal info when walk-in is required.

chasecustomer
chasecustomer (@guest_334014)
January 4, 2017 16:29

I opened a CSP (pre-approved), checking and savings in November. The banker girl was giggly/all smiles the entire time. Not sure if she was happy about the commission from the accounts, or if she was into me. She was around my age (23), and this is in a small town.

Maybe I’ll go back in and ask for her number to find out lol.

chasecustomer
chasecustomer (@guest_334043)
January 4, 2017 17:11

lol good point, if not for the “in-branch only” bank bonus, I never would’ve went into a branch. Since I was already there, I asked for her to check if I was pre-approved for any cards, ended up walking out with a CSP approval.

Mser
Mser (@guest_333991)
January 4, 2017 15:52

Chase shut down my wife’s new checking account a week after she applied for a $300 checking/savings promotion. We are persona non grata. They did this to me in 2015 and never paid the bonus despite me meeting all requirements. This time they paid the bonus (which happened just as Chase lost their class action for confiscating points upon shutdown) FWIW I recd a mailed notice about me being a member of the class action settlement a few days later. I’m sure that had they not lost the class action they’d have happily reneged on paying my wife’s checking bonus.

Bill
Bill (@guest_334044)
January 4, 2017 17:12

Any idea why? Had you done the bonus many times before? My wife and I were both turned down for the CSR because of the 24/5 rule, but I was able to convert an old CS (that has been CSP) to get the $300 travel bonuses.

Dave
Dave (@guest_333930)
January 4, 2017 14:08

I must be a model customer than. I went into a Chase bank last week and opened up both a credit card and a checking account!

Michael
Michael (@guest_333969)
January 4, 2017 15:07

I’m sure the banker told you that. They like their new account commissions.

Bill
Bill (@guest_333974)
January 4, 2017 15:14

Especially when you open more than one account and become a relationship customer! I got a $500 offer in the mail last year for opening savings and checking and sent my wife in. She said the banker became her new best friend. I just got another one and will go in myself and figure I’ll get the same treatment (I did the last time I did it).

Mike L
Mike L (@guest_333989)
January 4, 2017 15:43

I was able to get a $400 checking coupon (from JT at TPG) and a $200 savings coupon. The banker told me I was “very good with coupons” haha.

Dave
Dave (@guest_334031)
January 4, 2017 16:46

Nice. I had a 300/200. I didn’t think the $200 savings coupon was worth it though for tying up $15,000 for 3 months.

Bill
Bill (@guest_334040)
January 4, 2017 17:10

Wow, $400 for checking — nice deal! Mine is 300/200, same as Dave’s.

Bill
Bill (@guest_334042)
January 4, 2017 17:11

Dave — for the $300 you need to have the Premier Checking, don’t you? So if you need to have a high balance for the checking, might as well get the extra $200 for savings.

Mike L
Mike L (@guest_334086)
January 4, 2017 18:32

For the $400 it was the Premier Checking. Like Dave said, I don’t think I would have tied up $15k for 3 months for $200, but $600 is an entirely different story. Most of the $300 checking coupons I get in the mailers in my location (Chicago) are for the basic Chase Total Checking account.

joe
joe (@guest_333912)
January 4, 2017 12:55

Is there a box somewhere that you have to check off (or not check off) to get pre-approvals in branch? I got the CSR pre-approval in branch, but my wife so far has never had a pre-approval in branch

Tory
Tory (@guest_333943)
January 4, 2017 14:39

Is she opted out of receiving credit card pre-approvals in the mail? Are her credit reports frozen?