Loyalty cards are in the news again, this time over Boots announcing an ‘improvement’ to its over-60s reward scheme. Although Boots increased the amount of points given, it ended the scheme’s 10% discount.
This is just months after BA changed its reward scheme to Avios. Like Boots, BA increased the amount of points its card awarded, but in real monetary terms customers may actually be worse off.
Could changes like this herald the end of loyalty cards?
Are loyalty cards getting worse?
Once criticised for being Big Brother systems that spy on consumers, loyalty cards now seem to be getting their inspiration from 1984’s the Ministry of Plenty, where a reduction in chocolate rations was presented as an ‘improvement’. In the case of loyalty cards, you might be getting more points, but are you actually getting more real-world rewards in return?
Of BA’s change to Avios points, Which? Convo commenter Murk said:
‘The times by ten is a pure ploy so they can say “20 Avios” rather than “2 Airmiles” and have people think “Ooh, that’s more”. Are people really that stupid?’
‘They were wrong to dress it up as something “better”. Especially considering the age group of the audience.’
Are reward cards worth it?
However, Nicola (@NicolaLW) tweeted that Boots should be free to do what it likes:
‘I guess it’s their reward scheme to change isn’t it? If they lose customers then that’s the outcome of the change.’
I’m a card-carrying consumer – Nectar, American Express, TopTable, among others.
As Nicola alludes, shops don’t have to reward you for shopping with them, but one thing these reward schemes have in common is their Zimbabwean units. I have several hundred TopTable points; impressive? Not when the minimum credit is 200 points.
With AmEx, 10,000 points is a £50 M&S voucher. Not to be sniffed at, but that’s probably about £5,000 of spending, or 1% reward.
The other drawback is that points have a use-by date. Avios points have previously expired before I had next planned to fly. I’ve also lost my TopTable points for one free meal. Then again, this might not have been such a good deal anyway.
TopTable offers 50% off without any membership points – if there are two of you dining that’s the equivalent of one free meal, making TopTable’s reward points basically useless to me.
And as for Nectar – I joined when it was the Sainsbury’s scheme and around the turn of the millennium I had nearly enough points to go on the Eurostar. A decade or so of collecting and a new name later, I’m 20,000 points richer, which is about enough to go on the Eurostar…
End of loyalty cards in sight?
My hunch is that the future of loyalty cards will be more points but fewer prizes. Reward schemes must benefit both the consumer and the supplier – my suspicion is that suppliers are seeing fewer benefits and so they’re decreasing rewards accordingly.
But this may result in a death spiral, as more of us stop going out of our way to sign up for loyalty cards. These schemes need a critical mass of users to be of any value, meaning they might be scrapped altogether.
So, with reward cards seemingly becoming less rewarding, will you stop them from influencing your shopping behaviour? Would you be upset if retailers got rid of these loyalty schemes?