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Do changes to high-street loyalty schemes ever benefit us?

Tesco clubcard

Tesco recently saw a backlash from its customers after announcing changes to its Clubcard scheme. But it wouldn’t be the first company to do so. Why do loyalty schemes often change for the worse, asks our guest author Lady Janey.

Tesco claimed the changes to its Clubcard scheme were designed to ‘simplify’ the system.

Under the old scheme, points saved could be redeemed for up to four times their value. But in its wisdom, Tesco has decided that it’s much better to give customers just three times their worth instead.

Tesco finally backs down

Following an understandable backlash from customers and the intervention of Money Saving Expert Martin Lewis, Tesco has finally seen sense. Although it is not withdrawing the change, it has now been postponed so that customers have an opportunity to use their points to full effect before the change is made in June.

Changes of this kind, marketed as being of great benefit to the customer, are always a source of great irritation to me. Will this change affect you – and will you continue to use your Tesco Clubcard when the points you save are worth less than they are now?

My loyalty isn’t being rewarded

I was furious when Cineworld emailed me about the launch of its new Cineworld Plus upgrade. I’ve been a Cineworld member for years because I get a discount on tickets when I book online. Now I have the option of upgrading (for an annual fee) to a scheme where I would get exactly what I had before! I have resisted the temptation as yet to sign up.

And I used to have an Egg cashback card giving me 1% cashback on purchases. When Barclaycard took over Egg, I was informed about the ‘good news’ that I could now have two cards – a Visa and an American Express. Sounds fair enough in principle – Amex still gave 1% cashback, but Visa was now only 0.5% – considering that not many places accept Amex, I lost out on loads of cashback.

They emailed me again a few months later with the ‘fabulous’ news that there would be just one Visa card and from now on I would always get just 0.5% back. How wonderful. I now earn less cashback than ever.

Do you still use high-street loyalty schemes?

Tesco, along with many other companies, may say that the changes they implement to their loyalty schemes are for the benefit of their customers, but I beg to differ. How about you? What changes have you noticed to loyalty schemes and membership cards you use?

This is a guest contribution by Which? Conversation community member Lady Janey. All views expressed here are Lady Janey’s own and not necessarily those also shared by Which?.

Comments
Member

I am in loyalty schemes for supermarkets, various stores, credit cards, airlines, hotels, fuel, coffee shops, etc.

I have a few cards I actually get something out of, but for the rest I present when I remember and if I get anything out of them it is a bonus. I have never shopped to get double points or whatever their latest gimmick is, so probably miss out on a lot of points.

Loyalty schemes are for the benefit of the company not the customer. They are designed to reel you in, but once they have you, benefits are always reduced.

But do any of them have my loyalty? No.

Member

You’re absolutely right alfa, loyalty schemes are for the benefit of the company not the customer. Benefits are always reduced once they’ve got you to sign up!

Member

I agree with alfa here.

Member

Coming up for air, can I just agree with Alfa. My club card plus account was terminated last October and since then I’ve not had any kind of replacement from Tesco. They have reduced the value of “points” (what ever these are. Points are infinitely elastic.) recently. Although it is a way of reducing costs for Tesco, it does seem counter-productive as it is also seen as penny pinching by the consumer, who believes that the dividends are meagre enough as they were. One either adopts the attitude that shopping is necessary and thus one takes any hand out that’s given, or one gets cross at the parsimony and shops elsewhere. Being somewhat set in habits, I tend to do the former and simply use the coupons, when they mysteriously arrive, for the next shop. Realising that companies will do all they can to get a profit, that there is no compassion in this business (though they like to try and show how caring they are – all those special offers and tokens for charities) means that I shop for what I need and shop around for the best deal, except for groceries when I can’t be bothered. Buying groceries sensibly cuts costs anyway and convenience is worth an extra penny or two.

Member

Couldn’t agree more VynorHill. Many thanks for commenting.

Member

I don’t pay attention to what Tesco does with its Clubcard scheme although the occasional £5 voucher off a future shop makes up for the poor results of their Brandmatch scheme. Tesco is not our preferred supermarket and is mainly used for top-up shopping but occasionally we do a big shop there and after spending £100+ [much of it on branded goods] are underwhelmed to find that we have saved 9p or some such paltry amount against the other big supermarkets. Perhaps I am missing something, but I expected Tesco to do better than that and roundly beat the other majors into a corner on pricing. In my opinion that’s become their only weapon now because their quality has declined on fresh produce, they have de-listed numerous branded products and substituted inferior own-label products, they have too few checkouts open so long queues build -up, and the disposition of stock around the store is chaotic. Nine times out of ten the checkout staff have to be reminded to handover the button to drop in the preferred charity box.

Although we much prefer Sainsbury’s [the only convenient alternative in our area], their Nectar Card loyalty scheme is a pain with each shopping trip producing a handful of useless vouchers for things we’ve just bought or with unrealistic spend thresholds over too short a time span. I don’t like the idea of stores’ computer systems checking what we buy and calculating what to promote. I’ve always disliked the sneaky and intrusive nature of such schemes where they seduce people through the lure of a saving or extra points into buying something that might not be the best value product at the time or is stock they want to shift. Some of what we buy is not for us but for other people on an occasional basis so why should a computer decide that we shall need more of it by the end of the next week?

Perhaps we are not representative of customers generally. There was an outcry when Tesco recently ‘rationalised’ the value of their points so obviously a large number of people are very tuned into these schemes and go to some trouble to ensure they get all that is promised. Thankfully, Tesco have given them some extra time in which to crystallise their points, but that shows that loyalty does not come naturally to bastions of commerce; it is still a one way street and the customers’ accumulated loyalty can be discarded in a trice to avoid having to repay it with value.

Member

Absolutely John, well put. Loyalty is indeed a one way street and I doubt that will change anytime soon. In fact, it will probably only get worse.

Member
nermal says:
28 January 2018

Have to say I use Sainsbury’s Nectar myself. I just leave the points alone and let them accumulate and then I go and spend them in Argos, buying everyday items like kettles and last time, even a pressure washer. Using them in this way makes me feel I am actually gaining something concrete for them rather than just a few pence off shopping I was going to buy anyway and wouldn’t notice the difference. Next purchase looks like it’ll be a new microwave as my old one is on its last legs…

Member

I think that’s the right approach, Nermal, but I seem to recall that Sainsbury’s slashed the spend exchange rate for Nectar points not so long ago.

Member

I’m Sainsburys too nermal, am just a creature of habit. I think I should get far more points for my money though as spend a fortune there and I think the points allocated per purchase are paltry in comparison. What do you think? I have used the points for household items in the past but tend just to save them all up to replenish my wine collection on a regular basis! 😉

Member

I don’t pay much attention to loyalty schemes.

I have had a Tesco card for years and occasionally receive vouchers in the post. I manage to use the cash vouchers but rarely the ones that offer a discount on the price of products. The ones offering a discount on the price of fuel were welcome because I buy fuel at the supermarket. After moving home, Morrisons became my nearest supermarket but their discount vouchers seem few and far between. At least B&Q sends discount vouchers by email after making purchases and all that’s needed is to turn them up on the phone when next in the store, but the downside is that B&Q sends frequent marketing emails as well.

I would prefer to use shops that offer lower prices rather than loyalty cards.

This link shows the market share of supermarkets and if you can be bothered you can check how it has changed over time: https://www.kantarworldpanel.com/en/grocery-market-share/great-britain/

Thanks for the information Lady Janey. I have a good number of Tesco points and now know the deadline for using them.

Member

you’re welcome wavechange, happy to help. Still lots of time thanks to Martin Lewis to spend those points. I don’t rate loyalty cards at all, I have them because I may as well but I don’t think I really benefit that much apart from the odd £1 here and there. These companies get a lot more out of me than vice versa!

Member

The reason I have held on to Tesco points is because they can be used to provide a discount on click & collect purchases – convenient because there is no need to wait in for a delivery. I have now learned that faulty goods cannot simply be returned to the Tesco store from which they were collected, so the scheme is less attractive.

Loyalty schemes annoy me because they inflate prices and if you don’t play the silly games you are wasting more money.

I wonder if we should be supporting brands such as Aldi and Lidl that don’t (I believe) have loyalty cards. I was very unimpressed by their early stores but know an increasing number of people who use them as supermarket. It would not be a convenient option for me.

The worst part of having a loyalty card is knowing that you are being tracked by the company. I have a friend who has worked in data aggregation for a few years and is now working on a project for one of our large supermarkets. We are planning to meet up and I look forward to finding out a little more about this practice.

I’m disappointed that your Convo has not attracted more comments, LJ, but give it time.

Member

You can get extra Nectar points this weekend at Sainsbury’s:
https://www.moneysavingexpert.com/deals/sainsburys#freenectar

Every swipe (there are exclusions) gets you between 200 and 5000 extra points for a £10 spend.

Member

Bit of a fiddle these bonus points….

You get a coupon saying You’ve won 200 Bonus Nectar points

But you need to read the smaller print underneath that says To get your points scan this coupon with your Nectar card the next time you shop in store by the date show which is 18/02/18.

As has already been said, it is the company that benefits most as many will not read the smaller print. ☹️

Member

Aldi and Lidl don’t have loyalty cards and their market share is increasing. It was interesting to read this on the Which? website: “According to reports from The Sunday Times on 11 February, Tesco is alleged to be planning a new stand-alone discount brand to take on Lidl and Aldi. The newspaper speculates that Tesco is working on a ‘secret plan for a new discount grocery chain’ to take on the growing German discounters Lidl and Aldi. It ‘would match [Lidl and Aldi] on price, and offer a far more limited range of products.’ When asked for comment, Tesco told Which? it would not comment on rumours and speculation. If the rumours are true, it could completely shake up our ranking of the UK’s supermarket brands in years to come. Watch this space.”

Read more: https://www.which.co.uk/news/2018/02/the-best-and-worst-supermarkets-of-2018/ – Which?