I heard about this mid-last week and thought I’d pass it along. It’s a great example of how innovative rewards programs can tap into consumer’s wants and needs, (hopefully) fostering loyal, happy customer relationships.

American Express has been expanding its Membership Rewards program in recent months to include new partners and redemption options. In its latest move, cardholders can now redeem points to pay federal, state and local income taxes. Interesting, no? Launched just in time for tax season, this reward could be very enticing to cardholders who need a little extra help paying their 2009 tax bills.

The option to pay taxes with rewards points comes in addition to another new feature that allows customers to use points to pay for everyday purchases such as gas, groceries, phone, wireless and cable bills. In addition to this feature, American Express has also added new travel, dining, entertainment and retail partners.

Read the American Express press release here, including this statement from SVP Lynne Biggar about how the company’s new rewards can benefit customers:

“We know that Cardmembers want a rewards program that offers everything from practical and everyday rewards to the extraordinary,” said Lynne Biggar, senior vice president, Membership Rewards Marketing and Partnerships. “In 2010, we will continue to provide the reward options that our Cardmembers want and are focusing on making them more relevant and attainable. For example, just in time for tax season, we have added the ability to use points toward tax payments.”

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