The retailer unveiled plans Tuesday that will let customers collect and redeem the value of the ubiquitous bills on a loyalty card or smartphone.
But that doesn’t mean the colourful currency adorned by the smiling Scot, Sandy McTire, is going the way of his jaunty plaid tam and scarf.
“Donated to charities, accepted at local businesses, and found tacked up in pubs around the world, many consider Canadian Tire to be Canada’s second currency,” said Allan MacDonald, the retailer’s chief operating officer.
“We respect that heritage. But we’re excited about how the (digital) program will change our relationship with our customers and help grow our business.”
In fact, Canadian Tire didn’t even consider eliminating the much-loved paper currency with the mustachioed Scrooge-like character, first introduced in 1958.
The new digital program will launch in Nova Scotia on Oct. 10, and in the rest of Canada on Oct. 28.
Related reading: 7 surprising things bought with Canadian Tire money
MacDonald said the new program will allow customers to collect, manage and redeem rewards on their smartphone or online.
Mandeep Malik, an assistant marketing professor at the DeGroote School of Business at McMaster University, said the creation of Canadian Tire money was ingenious on the retailer’s part.
“The way it was designed, it was very intentful on giving customers a currency feel so they felt like they had completed a transaction and had been rewarded,” he said.
“They could carry the bills in their wallet and it would remind them to come back. The cleverness of the branding was centred around an individual of Scottish heritage who was smart about spending money and savings.”
Despite its success, Malik said it’s about time Canadian Tire offered a digital option to their popular loyalty program.
“Dare I say, it’s a little bit overdue,” he said. “In its current form, it’s defeating its purpose, chipping away at good margins without infusing the customer relationship. Today’s customer has moved into a digital age where they’re expecting retailers they have a relationship with, brands they have a relationship with, to make their shopping experience more personal.”
Canadian Tire said the program will also allow it to tailor deals and specials to customers based on their shopping patterns.
“The loyalty program is going to be at the root of virtually all of our marketing going forward,” said MacDonald.
The retailer said customers who pay with credit, debit or cash will now receive a base return rate of 0.4 per cent of their purchases in Canadian Tire money or put onto their loyalty card.
Those who shop with a Canadian Tire Options Mastercard will receive four per cent back on purchases at Canadian Tire, Mark’s and Sport Chek. With paper Canadian Tire money, customers had received a rebate only on purchases made with cash or debit.
Customers who sign up for the digital loyalty program will also be able to return items without a receipt, because their purchases will be logged through the app.
Irene Nattel, an analyst with RBC Capital Markets, said the program will help Canadian Tire by targeting customers with specific deals.
“Over time, we would expect the new loyalty program to help drive traffic/basket/sales at Canadian Tire,” she wrote in a research note.
Canadian Tire money was created by Muriel Billes, wife of Canadian Tire’s co-founder A.J. Billes in 1958. It first appeared with a smiling tire and a smiling coin running hand in hand. The logo was later replaced by Sandy McTire, a character invented by employee Bernie Freeman in 1961.
There is an estimated $100 million in Canadian Tire money redeemed each year, with more than $1 billion of Canadian Tire money in circulation since its inception.
Follow @LindaNguyenTO on Twitter.
Note to readers: This is a corrected story. A previous version wrongly stated rebates are based on a sliding scale.