Retailer Loyalty Reward Programs Mean Never Having to Pay Retail

  • Share
  • Read Later

Store reward programs seem like a great deal for shoppers, with instant discounts and special offers not available to non-members. But there are tradeoffs to all these deals. Retailers haven’t designed and instituted these programs out of pure kindness and the generosity of their bottom-line hearts, and at some point the savvy consumer must ask: Are you using the programs to get discounts that help you spend less? Or are retailers using loyalty programs to get you to spend more?

The WSJ story on retailer reward programs begins with the line:

It’s starting to feel like you should almost never have to pay full price.

And this is true. What with a never-ending stream of daily deal sites, the proliferation of stores where merchandise is constantly on sale, and a steady stream of coupons saving consumers tens of millions annually, there’s no shortage of ways to avoid paying full price. Things have gotten to the point where the “new normal” deeming something a legit bargain might be 50% off. The ubiquity of discounts may make you wonder whether today’s “original” prices are meaningless—they’re numbers no one really pays, inflated mainly to make the discounts seem more impressive (a marketing strategy known as “anchoring”).

In any event, it seems truer than ever that nowadays, only suckers pay retail. One of the easiest ways to avoid the full price is by joining store reward programs and/or signing up for retailer e-mails. The WSJ story explains that these retailer programs follow directly on the heels of the barcoded supermarket and drugstore fobs that every shopper and their grandmother now has on their keys (or smartphone). Here are the sorts of discounts program members can expect:

Old Navy, the bargain-priced division of Gap Inc., had a secret sale last year, with its $8.50 camisoles for $2. To receive the discount, shoppers had to flash a coupon or say to a sales associate “Cami for me.” The clothing store Anthropologie offers discounts to Anthro card members on their birthdays. DSW does as well, along with another coupon on shoppers’ half-birthdays.

That DSW must really love its customers. Who else celebrates a half-birthday? I’m not even sure Hallmark has a card for that occasion (yet).

But in order to get anything in this world, you must give something as well. In terms of getting reward program discounts, what shoppers give up is personal data. That doesn’t seem like much—until you realize that this data is used, plainly, to try to get you to buy more and more, negating any money you would have otherwise saved from reward program discounts.

Armed with details regarding what you like, how often you shop, and what kinds of deals you find most tempting, retailers are better equipped to entice you to splurge at every turn. From the WSJ piece:

Stores can market to shoppers directly based on the products they buy, aiming to win an even greater share of their wallets, in retailer parlance.

Retailers have good reason to focus on turning casual shoppers into loyal customers: 15% of a store’s most devoted shoppers can account for half of its profits. And so, naturally, reward programs are most rewarding to the most loyal shoppers, who shop the most and buy most often. In a list of advice for getting the most out of reward programs, the WSJ offers this tip:

Don’t Shop Around: Shopping at just three or four stores racks up more loyalty points than buying at many stores.

True. But if you’re avoiding a store because it doesn’t have a loyalty program or you haven’t amassed many points with its program, then you’re not shopping around in your best interest, and you’re possibly missing out on better deals at that store. Who’s the winner in that scenario? You or the retailer that has you hooked, head in the sand, on its reward program?

Store reward programs can help you save—and heck, sometimes even those normally annoying e-mails give you a great gift idea or a head’s up on a worthwhile sale. Overall, though, a smart shopper must keep in mind: In order to “save” lots of money with these programs, you have to spend even more.

MORE:
Why ‘For a Limited Time Only’ Makes Shoppers Spend Like Crazy
How Amazon Gets You to Stop Shopping Anywhere Else

0 comments
Sort: Newest | Oldest