Del Amo Fashion Center, which with 2.65 million square feet of retail space claims to be the world's largest indoor shopping center, will become the first mall in Los Angeles County to issue its own credit card for purchases at most of the center's retail shops, a mall spokeswoman said.
Brandace Berger, vice president-marketing, said more than 300,000 consumers who live within 10 miles of the mall will be sent letters in mid-March indicating that they have been approved for the card, with credit limits ranging up to $3,000. Customers need only sign and return the form to receive a card.
Applications will be available for other customers in May at counters throughout the mall.
Avco Financial Services Credit Card Inc. in Irvine will be overseeing the new credit card service, believed to be only the third in the nation. Avco also offers a card at Fashion Island in Newport Beach, and Bank of America operates such a service at South Coast Plaza in Costa Mesa.
Berger said she expects that nearly 80% of the mall's 350 merchants will agree to accept the card by March. However, none of the eight major department stores in the mall, including Sears, Roebuck & Co., J. C. Penney Co., I. Magnin and Bullock's, will honor it.
"We're pleased that so many of our merchants have been open to the idea," Berger said, adding that she has not given up hope that the so-called anchor department stores will soon decide to participate.
James Gray, executive vice president at Bullock's, said the decision not to accept the Del Amo card was handed down from corporate headquarters. "We would prefer that customers use the Bullock's proprietary card because of the services it provides us," he said, noting that the company bases much of its direct-mail promotion on buying habits reflected by card sales.
"We think we are already providing the services that are required. However, we re-evaluate our services from time to time. If these mall cards become extremely strong and our customers started demanding them, perhaps we would accept them."
Gary Dianella, owner of the Gift Tree in the mall, agreed six months ago that he would accept the card. About 70% of his sales are made with credit cards, with an average bill of $35, he said.
"A person shopping in the mall, if he has the mall credit card, may be influenced to stop by my shop," Dianella said. "I'm expecting more sales. I think if 80% (of the merchants) go with it now, it will eventually turn out to be 100%."
"We see it as providing better customer service," said Michael Contreras, manager of Zeidler & Zeidler men's store. He said credit card sales make up 28% of the store's sales, with an average card sale of $125.
Berger said the mall, which projects sales of nearly $400 million this year, surveyed shoppers in 1984 and found that 75% would use a mall credit card.
No statistics are available on the number of shoppers who use credit cards for purchases in shopping malls, according to the International Council on Shopping Centers, a New York-based trade group. However, a spokeswoman for the National Retail Merchants Assn. in New York said that nearly 70% of purchases in department stores with annual sales of more than $250 million are made with credit cards.
"Credit is a vital part of the retail arena," said Marian Rothman, a vice president with the association. "It may be that the shopping centers are marketing a tool to establish mall loyalty."
Doris Kitchen, an Avco assistant vice president, said the Del Amo credit card will operate much like a Visa or MasterCard except that there will be no annual or setup fee. The annual finance charge on balances will be 18%, and merchants will be charged at a rate comparable to what financial institutions charge for transactions on Visa and MasterCard, usually about 3%.
A survey of other malls in the area indicates that many have considered issuing their own cards but do not plan to do so in the near future.
"We have considered it in the past," said Linda Smith Frost, marketing director of Santa Monica Place, which has 160 shops and annual sales of $130 million. "It's prestigious but, in all practicality, it is only moderately successful."
"We've talked about it," said Patti Maude, general manager of Long Beach Plaza, a 151-shop mall. "But it's so new in the industry that people are sitting back and waiting to take a look at it first. It may, however, be something that becomes the standard."
At least two malls indicated that they might issue cards by year-end.
Mary Goodstein, marketing director of South Bay Center in Redondo Beach, about two miles north on Hawthorne Boulevard from Del Amo Fashion Center, said the mall, which is closed for remodeling into an enclosed center with 150 shops, is in "preliminary discussions" about establishing its own card.
Goodstein would not say with which financial institution the mall is discussing the idea or when the service might be offered. The mall will be renamed the South Bay Galleria when it reopens Aug. 26.
Carrol Beals, assistant manager at the Beverly Center in West Hollywood, said a decision about whether to issue a card will be made within six months. Beverly Center has 170 shops, including Bullock's and the Broadway.
Some previous attempts to offer a mall-wide card have not been successful. The 160-store White Flint Mall in Rockville, Md., started offering a card in 1976 that was managed by Citizens Savings & Loan. In 1980, the card was discontinued after department stores, including Bloomingdale's, decided to stop honoring it, according to George Aines, an account manager for Citizens.
A Bank of America spokesman said it is pleased with the way the service is being accepted at South Coast Plaza. The Orange County mall, which started offering the card last April, is believed to be the first California mall to do so.
"We think the card is doing real well," said Curt Olsen, a Bank of America spokesman. "The number of customers has been increasing each month" and is now at 13,000.
Olsen acknowledged that the number is low for a 200-shop mall with annual sales near $400 million, but he said the South Coast card holders use the cards frequently and for big-ticket items. He did not provide any figures.
Werner Escher, director of community relations for the mall, said he, too, considers the mall card a success. "The card is generating (increasing) sales we feel we probably wouldn't have had without it," he said.
Avco's card at Fashion Island in Newport Beach is in only its third month. Of the more than 250,000 preapproved applications that were sent out, 30,000 were returned, officials said.
Avco's Kitchen said that, during the first five weeks of the card, $500,000 in sales were made with the card.
"The merchants tell us that the people who have presented the card are first-time buyers in their shops," Kitchen said. "We're seeing about 30% of credit sales being done on mall credit cards."
Kathleen Lauren, the mall's marketing manager, said 65 of 70 shops in the mall accept the card. None of the five department stores honor the card.
"Our customer response is very supportive," she said. "Store owners are reporting seeing new faces in the store who are asking at the front end if they accept the card."
Lauren said 1984 sales for the mall will exceed $140 million.
"I think the card will make a big difference in 1985," she said. "I think we will have our healthiest year ever."