- Elaine Wong

Sears and Kmart are encouraging consumers that there is “no time like the present” to start saving for the holidays with a combined push, launching today (Monday), that touts the retailers’ new Christmas Club card.

The program lets consumers store funds on the retailers’ designated holiday card, to be used for Christmas spending. A minimum of five dollars is required to activate the card, and consumers may add additional money either online or in-store. (Sears Holding Corp., the parent company of Sears and Kmart, owns 3,900 stores in the U.S. and Canada.) Consumers have till Oct. 31 to activate the card, and Sears and Kmart will offer an additional three percent—to be applied towards the final card value—at the end of the promotion on Nov. 14.

The campaign, by Draftfcb, Chicago, Euro RSCG and MPG, which handles media buying duties, resurrects an old savings trick used by financial institutions. At the height of their popularity, Christmas Club cards allowed customers to withdraw and apply a specific amount towards a holiday savings account from their weekly earnings.

With holiday retail sales accounting for as much as 20 to 30 percent of a retailer’s annual revenue, Sears and Kmart are trying to combat a weak consumer-spending environment. A study conducted by Kelton Research, on behalf of Kmart and Sears, found that 58 percent of Americans are more concerned about how they are going to afford this year’s holiday shopping. The retailers are betting their Christmas Club card will help ease shoppers' concerns.

The effort spans across TV, online and in-store, including point-of-purchase, and coaxes consumers to save with such phrases as: “Get paid when you save for the holidays” (alluding to the three percent rewards deposit). This marks the first time in recent years that Kmart and Sears have come together in a co-branding effort, said Tom Aiello, a rep for Sears Holding Corp.

Aiello said the card is “a step beyond layaway” in that it assuages consumers’ fears of not being able to pay off their holiday purchases. “We have really high hopes for it,” Aiello said, adding that, “it gets customers thinking about the holidays, but we’re not out there selling to them early.”

Kmart and Sears have also been harking such promotions as “Christmas Lane,” which, the retailers say, give avid ornament/holiday keepsake collectors a jump-start on Christmas shopping. Others, like Toys “R” Us, have rolled out “Christmas in July” promotions, arguing that the recessionary times call for an early Christmas antidote.

Sears and Kmart have already begun pitching the card to associates, and members of MySears.com and MyKmart.com—the retailer’s social networking sites. The reviews so far have been positive. Aiello said Sears Holding Corp. has sold 13,000 Christmas Club cards already.