ZELLERS IN MORTGAGE BUSINESS
By Adnews Staff
Montreal-based discount retailer Zellers Inc. is helping people pay off their mortgages. Mutual Group of Waterloo, Ont. is now accepting Club Z points from people paying off house loans. Club Z is Zellers' customer loyalty program in which shoppers collect points to trade for merchandise. Under the deal, customers applying to Mutual for a mortgage will receive 10,000 Club Z points, plus an additional 15,000 when funding is approved. Home buyers may use Club Z points to cover the costs of legal fees, transfers and appraisal fees, or to pay down their mortgage rate. On a three-year, $100,000 mortgage, it would take 300,000 points to cut the rate by one-quarter of a percentage point. That's about $3,000 worth of shopping. Advertising for the program began earlier this month in Zellers Club Z catalog. It was created in-house with the help of Zed Graphics of Montreal. The mortgage deal will be advertised four times a year in Zellers flyers beginning next February. Ironically, a much bigger competitor in the mortgage lending business could end up supplying points towards Mutual mortgages. Zellers and the Canadian Imperial Bank of Commerce formed an alliance this month that allows customers to gain Club Z points whenever they use CIBC Visa cards at stores around the world. Padulo Integrated of Toronto created a campaign for the Visa program, using TV, radio and direct mail. Zellers and Mutual spent more than a year setting up the mortgage program, so it was well in the works when Zellers began negotiating with CIBC about the Visa card.