Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
JENSEN KENNETH R
  2. Issuer Name and Ticker or Trading Symbol
ALLIANCE DATA SYSTEMS CORP [ADS]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)
7500 DALLAS PARKWAY, SUITE 700
3. Date of Earliest Transaction (Month/Day/Year)
09/17/2010
(Street)

PLANO, TX 75024
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)
2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)
4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)
7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 09/17/2010   M   42,000 A $ 12 60,214 D  
Common Stock 09/17/2010   F(1)   7,920 D $ 63.64 52,294 (2) D  

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)
2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)
6. Date Exercisable and Expiration Date
(Month/Day/Year)
7. Title and Amount of Underlying Securities
(Instr. 3 and 4)
8. Price of Derivative Security
(Instr. 5)
9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)
11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Employee Stock Option (Right to Buy) $ 12 09/17/2010   M     42,000   (3) 06/08/2011 Common Stock 42,000 (3) 15,991 (4) D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
JENSEN KENNETH R
7500 DALLAS PARKWAY, SUITE 700
PLANO, TX 75024
  X      

Signatures

 Leigh Ann K. Epperson, Attorney in Fact   09/20/2010
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) 7,920 shares and $28.80 have been delivered to the Company in payment of the exercise price of 42,000 employee stock options.
(2) The total amount of securities beneficially owned includes: (a) 44,080 unrestricted shares; (b) 1,091 shares of restricted stock granted 6/24/03; (c) 621 shares of restricted stock granted 7/1/04; (d) 616 shares of restricted stock granted 6/10/05; (e) 458 shares of restricted stock granted 6/12/06; (f) 2,388 unvested restricted stock units granted 7/1/08; (g) 1,904 unvested restricted stock units granted 7/1/09; and (h) 1,136 unvested restricted stock units granted 6/30/10.
(3) This is an employee stock option grant that is fully vested.
(4) The total number of derivative securities beneficially owned includes: (a) an option for 6,208 shares granted 6/24/03, which is fully vested; (b) an option for 3,724 shares granted 7/1/04, which is fully vested; (c) an option for 3,547 shares granted 6/10/05, which is fully vested; and (d) an option for 2,512 shares granted 6/12/06, which is fully vested.

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