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 * HEFFERNAN EDWARD J   2. Issuer Name and Ticker or Trading Symbol ALLIANCE DATA SYSTEMS CORP [ADS] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) __X__ Other (specify below) Executive Vice President / Chief Financial Officer (Last) (First) (Middle) 17655 WATERVIEW PARKWAY 3. Date of Earliest Transaction (Month/Day/Year) 11/23/2004 (Street) DALLAS, TX 75252-8012 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 11/23/2004   F   2,299 (1) D $ 42.85 34,319 D   Common Stock 11/23/2004   M   6,718 (1) A $ 14.67 41,037 (2) D

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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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)

$ 14.67

11/23/2004

M

6,718 (1)

(3)

09/26/2012

Common Stock

6,718

(3)

195,800 (4)

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
HEFFERNAN EDWARD J 17655 WATERVIEW PARKWAY DALLAS, TX 75252-8012			Executive Vice President	Chief Financial Officer

Signatures

Leigh Ann K. Epperson, Attorney in Fact		11/24/2004
**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)	2,299 shares and $7.32 have been delivered to the Company in payment of 6,718 employee stock options.
(2)	The total number of securities beneficially owned includes: (a) 4,800 out of an original 12,000 shares of restricted stock granted 9/1/00, of which 0 shares are vested; (b) 9,264 out of an original 23,000 shares of restricted stock granted 10/9/00, of which 64 shares are vested; (c) 21,718 shares acquired by the exercising of vested employee stock options; and (d) 5,255 shares of performance-based restricted stock granted 2/2/04, of which 0 shares are vested.
(3)	This is an employee stock option grant that is fully vested.
(4)	The total number of derivative securities beneficially owned includes: (a) an employee stock option for 35,203 out of an original 40,000 shares granted 9/1/00, which is fully vested; (b) an employee stock option for 28,557 out of an original 40,557 shares granted 10/9/00, which is fully vested; (c) an employee stock option for 1 out of an original 38,313 shares granted on 6/8/01, which is fully vested; (d) an employee stock option for 63,282 shares granted 9/26/02, of which 16,382 shares vested on 9/25/03, 23,100 shares vested on 9/25/04 and 23,800 shares will vest on 9/25/05; (e) an employee stock option for 34,022 shares granted 6/24/03, of which 11,227 shares vested on 6/23/04, 11,227 shares will vest on 6/23/05 and 11,568 shares will vest on 6/23/06; and (f) an employee stock option for 34,735 shares granted 2/2/04, of which 11,463 shares will vest on each of 2/2/05 and 2/2/06 and 11,809 shares will vest on 2/2/07.

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