Mommy Katie: Comparing The Best Loyalty Schemes (Guest Post)

Saturday, January 18, 2014

Comparing The Best Loyalty Schemes (Guest Post)

Supermarket and store loyalty schemes have been part of the UK shopping culture for 30 years. All major UK supermarkets including Tesco and Sainsbury have a scheme and there are a number of chain retail stores such as Boots, Starbucks and Superdrug who have also started customer loyalty saving schemes.

All the loyalty schemes have different reward systems, but all are based on collecting points when making purchases in the particular store. The points can then be redeemed in different ways; some can be used for products or services which are not offered by the store they have been collected in and are redeemed through partnership schemes and some can only be used as money off future purchases. There have been changes over the years as retailers look to lure the consumer towards their stores to encourage them to stay loyal with bigger and better offers. There may be rewards which require some extra finance on top of points collected, so talking to your bank or a payday loan company such as Wonga may be the solution. It’s important to know though that this would only be for an emergency situation for a reward which was just about to expire.

The supermarkets are fiercely competitive for customer loyalty and the largest schemes are those with Tesco and Sainsbury’s. Tesco Clubcard has over 15 million members and operates in countries including the UK, Ireland and Polan. The Clubcard was launched in 1996 with the general earning power being 1 point per pound spent. This can be increased with the use of their Green Clubcard points where re-using carrier bags earns extra. The points can be spent in-store as money off vouchers or against partner offers such as RAC membership or meals at CafĂ© Rouge.

Sainsbury’s use the Nectar Points scheme where they can also be collected at Homebase, Ford, Vision Express, BP and British Gas. Generally speaking, two points per pound are collected other than petrol which is one per litre. There are opportunities to increase points by signing up to a number of deals and they can be spent at Sainsbury’s, Argos, online with Expedia or a number of other retailers.

The largest non-supermarket scheme is the Boots Advantage Card. Points are collected at a rate of four per pound spent, but can only be redeemed at Boots stores on through their online website. Unlike the supermarket points, there is no limit to how long they can be kept before they have to be used, but the disadvantage to the scheme is that you have to have enough points to cover a whole purchase, rather than being able to use them as a part payment.

There are always discussions about whether loyalty card schemes are worth it – many feel that reducing the prices generally would be of much more help () but there are huge online communities who look to share news and offers with each other to boost their points each month in order to spend on extra gifts and treats.

With 86% of adults in the UK carrying at least one loyalty scheme card and 29% carrying five or more, consumers are determined to collect the points from their favourite shops. There have been reports in past years of special offers leading to one shopper gathering enough points to buy return flights to New Zealand, but these extreme examples are few and far between. For the majority of people, it’s about the sensation of thinking they are treating themselves to something a little special and for the loyalty scheme operators, it’s about ensuring that they continue to make offerings to keep the customer spending with them.

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