Green Dot is sending the account holders of the Green Dot Premier card a new VIP card which will offer more services at the same price as the old card.
The VIP card is no different from the old Premier card with regard to price. It costs an additional $4.95 to have the card. When coupled with the standard maintenance fee of $5.95, having a VIP Card costs $10.90 per month. Of course, if you can generate enough transactions or make enough in the way of direct deposits, the maintenance fee is waived. Thus, a share of those Premier/VIP card holders are only going to pay $4.95.
The new benefit involves ATM fees. If a VIP uses an out of network ATM (such as at a bank branch) then Green Dot will waive their fee. The card holder is still on the hook for whatever charge the ATM owner wants to extract.
As well, Green Dot is going to waive the cost of getting a replacement card. Personally, I can’t see why any company would charge a customer for the opportunity to continue to use their product. Doesn’t it seem like a value to maintain a relationship? Long-term customers generate most of the profits for a program manager. Providing cards to new consumers is a risk, because perhaps one in four will never make more than three or four transactions. Nonetheless, Green Dot will be an exception to the norm when they offer free replacement cards to VIP customers.
I think this sets up an interesting experiment. While it seems obvious that Premier card holders will hang on to their VIP cards, what about those that might seek an upgrade. The degree to which individuals that don’t currently have the Premier decide that its worth it to pay the additional $4.95 should tell us something about the value of convenience as well as the value of added certainty over ongoing costs.