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Sunday, August 27, 2006

A question of loyalty

Loyalty cards. Points cards. Frequent buyer cards. Cards, cards, cards.

The grocery store I work at, like many other retail outlets, uses loyalty cards. In my family, we have very few loyalty cards - I've got only 4 of them, if you count my air miles card - because we really don't shop all that much. Which ones we got had more to do with where we lived than anything else, and of the cards we have, only one actually gets used right now. Unless we move somewhere closer to a certain competing grocery store or buy a car, we have no need of them.

Like many people, until I actually started working at a grocery store, I knew very little about them. I knew that without them, I wouldn't get the sale prices, which is why we got them in the first place. I knew we collected points, but like many, I felt the points were rather useles, since so many were needed to be able to get even small items.

I also had questions about privacy issues. The media has done stories about loyalty cards and the information gathered by them - usually with a sinister bent to the story, implying a threat to personal privacy.

That hasn't stopped people from using the cards. Some of the customers I get have so many, they loose track. I've had people rifle through several stacks of cards, each at least an inch thick, while trying to find the one they can use in our store. Others use the key-chain variety, and they've got more of these mini-cards on their key rings than keys. I often hear derogetory comments about the points, or even anger at how they "have to" use these cards to get the sale prices, as well as comments about how their personal information is being used and abused by these programs.

As someone who, until recently, knew very little about these cards, I've since learned that they are a lot more valuable to the consumer than I even imagined.

One of the things I've learned is that the points are actually worth something. They are considerred a form of currency. As an employee, I could get fired for lending my card out to a customer, because it's considerred theft. Customers can donate points to charity. They can be used to get free stuff in the store itself, or saved to get larger items for free or reduced cost.

One of the biggest complaints I get is over how hard it is to accumulate these points. It's certainly something I believed, too, until I learned how the system works. It turns out the chain I work for gives away 1000's, sometimes ten's of thousands, of dollars in points to *each* shopper, every month, if the shopper is willing to take them. Points are practically being thrown at the customers, yet amazingly few actually take advantage of them. The reason?

Most simply don't know about them. They don't read the fliers (neither did I, until recently), so they don't see the coupons they can use to get more points. They don't use the coupon kiosk, right at the entrance, where they can scan their card. The coupons printed out sometimes include points coupons, and sometimes even cash off coupons. I've never been a coupon shopper - I find coupons rather useless, since they tend to be for things I never use - but I always use the kiosk. I may not use the coupons I get that day, but when I do, they are for things that are useful to me.

A lot of people also don't update their addresses, which means they don't get the monthly booklet of coupons that gets sent out - there's usually about $5000 worth of points in there alone.

And finally, they just don't buy the items that have bonus points attached to them. That one, at least, I can understand. I'm not going to buy something I don't want or need, just because it's got extra points. I am, however, sometimes willing to try something new because it's got extra points, and all other things being equal, I'll choose the item with bonus points over the one without.

Some customers, however, have it figured out. I can always recognise them when I scan their cards and see how many points they've already got. These are people who know the game. They use every chance they've got to add on points, and never redeem them (unlike a lot of other cashiers, when an item scans as being redeemable, I actually ask the customer if they want to use their points and get the item for free, rather than automatically closing the pop-up). They quickly accumulate thousands of points a week. One customer I get uses his points to fly to a particular city in the US - every year. I've had many who save their points until Christmas, then use them for their Christmas turkeys. One told me she gets about 6 turkeys every Christmas for free by using her points. Others also use their points for their Easter hams. Still others save up for things like BBQ's, refrigerators, and other large ticket items.

So now, when I get customers complaining about how "useless" the points are, I try to tell them what they can do with those points. Most aren't willing to listen, though. Not much I can do about that.

The other complaint I get is that people "have to" use the cards to get the sale price. Well, that's one complaint I've never made myself. After all, the whole point of a loyalty card is to reward loyal customers. Otherwise, what's the point of having the program? The thing is, there's nothing stopping them from borrowing someone else's card. Especially if they're just passing through and won't be back. It's a win win situation - the card holder gets points while the visitor gets the cash savings. Some stores don't allow this but, while technically we're not supposed to, we cashiers will even go hunting for someone with a card we can borrow for a customer. We don't have a "store card" people can use (though I sometimes think we should - and donate the points to the chain's chosen charity), so the only other way is to use someone elses. The only "looser" in this scenerio is the store itself. There have been times when I've rung in hundreds of dollars in groceries for someone who had no interest in getting their own card, so I went looking for one for them. It almost hurts me to see someone spend that much money and not be able to take advantage of the savings. Sure, the store might "loose" $30 or more, but they're gaining something much more valuable - at least 2 happy customers.

Which leads me to the next point of contention people have - privacy issues. Yes, these cards are used to track sales. I can go online and actually see how much I've spent on each transaction I've made for months, how many points I earned, and how many (if any) I've used. I know that, while the numbers I see are just totals, the company that gathers this information has much more detailed information - they know exactly what items were purchased each time. I don't mind that. That information is used to provide better service for me in the future, which saves me time and money. However, their information on me, and every other person, is slightly skewed. It's the "borrowing" of cards issue. So many of these cards are borrowed, it's impossible to say with certainty that this person bought that item. While they can get general regional information, the individual information is inaccurate.

In the end, for the consumer, there are really no negatives when it comes to loyalty cards and, if they play it right, a whole lot of positives.

Loyalty does have its privilages. Even in plastic.

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