JCPenney rolls out CashPass rewards, a direct shot at Kohl’s Cash (2024)

Plano-based JCPenney has a new rewards and credit card program with its version of Kohl’s Cash that it’s calling CashPass, saying it expects to return $500 million to customers this year.

The 122-year-old department store chain has adopted many of the popular features of the earn-and-redeem cash rewards program that Kohl’s started 20 years ago.

“We want every trip to JCPenney to be worth it,” said Katie Mullen, chief customer officer. “We want it to be easier to take advantage of our rewards, easier to reach rewards milestones, and to make it a sure thing that every member sees rewards each year.”

JCPenney expects to grow its reward membership, which now totals more than 20 million customers who shop at the retailer an average of five times a year. Sales at the chain of 650 department stores have been on a decline and the latest effort follows JCPenney’s announcement last summer that it will spend $1 billion through 2025 remodeling stores, upgrading its online shopping platforms and improving its supply chain.

“Everybody is looking for ways to make their dollar count and stretch their value even more,” Mullen said in response to a question about why the program is launching now.

Customers will earn a $10 CashPass both for joining and on their birthday. Then a $10 CashPass is earned each time a member spends $200. The rewards expire after 45 days, but there’s no expiration date on points earned as long as the customers buy something within a rolling 12 months.

JCPenney credit card holders earn rewards 50% faster than before, Mullen said.

While many programs are trying to focus on how to give back to the highest-spending customers, Mullen said, this program was designed to be more accessible.

“We challenged ourselves on how to make it simpler and we can communicate our program more effectively in other languages,” she said. “We’ve made a commitment to stay free as a program. Not every one of our competitors can say the same.”

Mullen noted a few times during a briefing that the program is free. Last week Target followed Amazon and Walmart with a new paid membership program called Target Circle 360 with perks such as free shipping and discount coupons instead of cash back. Target, Walmart and Amazon charge fees for their membership.

JCPenney’s $500 million cash back estimate is separate from the $1 billion spending program, Mullen said.

So far, JCPenney has refreshed more than 100 stores and last week relocated a Wayne, N.J., store into the Willowbrook Mall, representing the first new store that JCPenney has opened in eight years. The retailer has also been speeding up its average delivery time to online shoppers. It has a new point-of-sale system in stores.

“We are pleased with the result we are seeing so far,” Mullen said.

Revenue at JCPenney declined 11% in the nine months ended Oct. 28 to $4.85 billion. It swung to a loss of $12 million from a profit of $173 million during the same period in 2022, according to a filing by Copper Property, the liquidating trust led by H/2 Capital Partners that was established for JCPenney’s debt holders during the Chapter 11 bankruptcy case. Dallas-based Sixth Street Capital is also an owner of the trust.

Since emerging from bankruptcy in December 2020, JCPenney has been paying rent of about $100 million per year on stores it used to own but were transferred into the trust.

Full-year results for fiscal 2024 ended in January haven’t been reported.

For the year ended January 2023, JCPenney posted a 3.4% decline in revenue to $7.6 billion and a profit of $219 million. The operating company that runs JCPenney stores is now owned by its two largest landlords, Simon Property Group and Brookfield Asset Management.

X: @MariaHalkias

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