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Are Loyalty Cards falling out of Favour?


Are Loyalty Cards falling out of Favour?

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Supermarket giant Tesco announced earlier this week that the way the company’s Clubcard loyalty points work is changing. The changes are hoped to “simplify” the system, but since they were announced suddenly, without warning, many customers were concerned that they would lose out valuable offers and years’ worth of savings. The shift has also, once again, called into question the place of loyalty cards in the modern world of shopping – experts believe the plastic could be approaching its dying days.

Tesco’s Changes

The main change, and main source of outrage for customers, was to the supermarket’s “boost” scheme. The programme allows shoppers to exchange culbcard points for vouchers worth two, three, or four times the points’ value, which can be spent at one of Tesco’s partner companies. One of the most popular deals involved Pizza Express. The restaurant chain was one of the partners to offer vouchers worth four times the value of customers’ clubcard points, the highest possible value.

As part of their simplification process, Tesco has announced that all vouchers will be worth three times the value of the points they were purchased with, rather than having values vary. This means that customers will get better deals with partners including:

  • APH Airport Parking
  • Denby Online Shop
  • Evans Cycles
  • Megabus
  • Red Spotted Hankey

However, it’s not all good news, as some of the most popular vouchers will be reduced from four to three times their points’ value:

  • Pizza Express
  • Prezzo
  • Shakespeare’s Globe
  • The Tower of London
  • Café Rouge
  • Hampton Court Palace
  • Lightwater Valley
  • London Zoo
  • Paradise Wildlife Park

Although some vouchers have increased in value, the maximum possible value of vouchers has been slashed by 25%. Many customers were outraged at the changes, and following a number of complains, and lobbying by Martin Lewis of Money Saving Expert, Tesco has agreed to postpone these changes until June. This will hopefully allow customers time to carry out plans they had made under the old system before changes come into effect. “It’s good to see Tesco listening” was Lewis’ response to the agreement.

Despite changes to the “boost” scheme, Tesco clubcard points will retain their current value. The only other change is that vouchers will be sent exclusively by email rather than post, so if you are one of Tesco’s 16 million active clubcard customers remember to check your spam folder. Tesco are also encouraging any customers who feel they have been negatively affected by the changes to get in touch through the customer care line.

Will Customers stay Faithful to Loyalty Cards?

Tesco’s changes, some experts believe, signals the loyalty card’s death throes. Natalie Bery, of Planet Retail, believes that the “concept of swiping a card at the till is dead”. She may have a point – neither of the UK’s current fastest-growing supermarket chains, Aldi and Lidl, have a loyalty card scheme in place, and retail analysts TCC found that only 5% of shoppers would stop making purchases at a shop if they were to discontinue their loyalty card scheme. Modern shoppers are far less likely to shop “monogamously” than in previous generations, and this pattern could eventually render loyalty schemes ineffective.

Although plastic loyalty cards may well be on their way out, the response of Tesco’s customers earlier this week proves that customers do want to be rewarded for frequently supporting a company. Tesco has offered customers clubcards since 1995, with no signs of the scheme stopping entirely, despite this week’s announcement. The Co-op, similarly, reintroduced a loyalty card back in 2016, despite it costing the company £35 million. Such a significant financial outlay would be completely misguided if shoppers did not appreciate and make use of it.

Rather than disappearing entirely, it seems more likely that loyalty schemes will transform to better match customers’ habits and new technology. One possible contender for taking on the loyalty card’s mantle is the smartphone. Apps like Stocard already offer a place for shoppers to digitally store all of their cards in one place, and Tesco’s new practice of emailing vouchers also suggests a trend towards rewards being digitised. Natalie Bery agrees: “Store cards might go because a bit of plastic in your wallet isn’t necessary”, she suggests, “But loyalty programmes aren’t on their way out – they matter too much to people.”

Bery also notes that Amazon’s Prime service is a great example of loyalty schemes being reinvented to serve the needs of twenty-first century customers, by offering access to video and audio content as well as faster delivery and cloud photo-storage to its subscribers.

Getting the Most out of Loyalty Schemes

Since the experts say that loyalty schemes will probably remain a mainstay of the shopping experience, below are a few tips for making the most out of them:

  • Sort through your memberships, and abandon the ones you rarely use. Focusing your attention on fewer brands makes it easier to keep track and you are more likely to end up earning your rewards.
  • Keep your eyes open for deals – if there’s an emailing list, join it, just bear in mind that not all offers are created equal.
  • Don’t let the scheme tempt you into buying more than you otherwise would. Loyalty schemes are, ultimately, designed to encourage customers to spend, so bear this in mind. A good rule of thumb is to not use deals in which you buy something you wouldn’t otherwise.
  • For more tips on sticking to a budget, see our blog on financial tips for the New Year. One great financial New Year’s resolution is to pay off debt – a solution such as an IVA, which allows you to pay only what you can afford in monthly instalments, can be an excellent way to get a fresh start, and hopefully make you feel less pressured to exhaustively search for loyalty scheme deals!

Loyalty schemes can be a great way to save money, and it seems that they’re not going anywhere, but do be careful to bear in mind that they can sometimes end up costing you money as well as helping you save it.


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