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Credit Card Situation - Is the U of M Contractually Obligated to Push Credit Cards?

UofMCreditCard.jpg

A previous post has appeared concerning the apparently cozy relationship between a credit card company and the U.

What stimulated this discussion was an article in Business Week that indicated that "in bag" promotions were being used by the U bookstores. I go to the bookstore (often) and have never seen such a credit card promotion.

I was eventually directed to our excellent University of Minnesota Bookstore Director, Bob Crabb, who seems like a stand up guy. He has given me permission to quote the following email:


Date: July 20, 2008 8:03:22 PM CDT
To: rcrabb@umn.edu
Subject: Fw: Quick Alert -- Friday, July 18, 2008

Here's the answer to the Chase inquiry. It seems the U does have an arrangement via Athletics.


----- Forwarded on 07/20/2008 08:02 PM -----
Daniel Wolter

BUSINESSWEEK: Businessweek has a lengthy look at university deals with credit card companies in their most recent issue. They include the U of M in that discussion. Unfortunately, the terms of the U of M contract read to be much more broad than is actually implemented in practice. Our contract with Chase is almost exclusively an Athletics arrangement, allowing Chase to market their card in Athletics venues, mailings to season ticket holders and in Web banner ads. The contract, however, makes it appear that the University is formally compelled to actively market Chase credit cards in all on-campus retail venues, which is not the case. This inconsistency was explained to Businessweek and they did include a brief mention of it, after explaining the broad terms of the contract. Please keep in mind that our agreement with Chase expires in 2009. The full article can be accessed by clicking here.

Daniel Wolter
Director, News Service
Office of University Relations
University of Minnesota

It is not clear to me what this statement by Mr. Wolter means.

Is the statement by Business Week:

Some campus card deals spell out in detail how schools will help market to their students. The University of Minnesota promises to push a school-branded JPMorgan Chase (JPM) card "in all University retail and athletic venues." The university says it will employ "in-store signage" and "in-bag credit card applications" at campus stores. The school gets $1 for each new cardholder and $3 annually for each active card user, in addition to 0.5% of every purchase made with the cards.

true or not? Is the above quote accurate? And if it is, why?

Whether we are doing it or not isn't the point. Have we signed a contract saying that we would do this?

One thing that is clear, however, is Mr. Crabb's position which he stated in the comments section of the original post:


The article is not true - at least as far as it applies to the University of Minnesota Bookstores. The Athletics Department apparently has a deal with JPMorgan Chase. The Bookstores were never consulted and are not a party to it. Had we been asked to participate, I would certainly have declined. Student credit card debt is a major concern of the Bookstores and of the University. We have not allowed card solicitation in the stores, or in our shopping bags, for the past several years.

Bob Crabb
Director
University of Minnesota Bookstores


So what's the real story here? Tom? Bob? Mr. Wolter?


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