Loyalty Reduction Cards

Jul 29, 2004
George Anderson

By George Anderson

Bill Virgin, a columnist with the Seattle Post-Intelligencer, has a number of problems with loyalty cards and his grievances provide food-for-thought for retailers with
card programs.

For one, Mr. Virgin sees loyalty card programs as eroding the credibility of retailers’ pricing practices.

“I can’t be the only one who rolls his eyes whenever the cashier looks at the receipt and — no doubt compelled by corporate edict — announces ‘you saved $23.67 by using the
card,” he writes.

“Well, no, I didn’t. I used the card to get a price that’s within the range of what I would normally pay for that item; the posted price for non-card holders is often an amount
no sane person would pay.”

He also questions if the widespread availability of loyalty cards hasn’t actually created an environment where consumers are less loyal. The emphasis on a card’s “savings” has
focused consumers more than ever on price. “If Safeway has the better deals this week, that’s where the money goes. If QFC is better next week, they get the business,” he writes.

Moderator’s Comment: What are your thoughts on Bill Virgin’s grievances with loyalty card programs?

Note to retailers: There is no loyalty without trust.

On a recent trip to a grocery store where we occasionally shop, we came across a box of cereal our kids devour in mass quantities. After looking at the
shelf tag, we discovered that, even with the additional savings we’d receive with the store’s card, we’d still be better off buying the same item at Trader Joe’s. Turns out that
we could buy almost two boxes at TJ’s (without a card) for the one sold by the other grocer with the card.

Which of the two retailers do you think we trust more? Where do our loyalties lie?
George Anderson – Moderator

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