Loyalty schemes less rewarding than you would hope


Supermarket points a bait to rake in your personal data

CHOICE analysis of supermarkets’ loyalty schemes reveals the loyalty is one-sided with the average shopper having to spend big and wait a long time to enjoy any real benefits.

The consumer group says loyalty schemes can discourage consumers from finding better buys elsewhere and encourage them to trade large amounts of personal data which may be worth much more than any rewards.

CHOICE research found rewards programs offer significantly less than a $1 return from every $100 you spend.

For example with a FlyBuys card at Coles earning a $50 shopping voucher requires a $15,700 spend, which for the average weekly shopper* would take almost two years.

Woolworths Everyday Rewards requires spending almost $11,000 to get the same voucher, which would take the average weekly shopper over 16 months to earn.

CHOICE says flight deals aren’t any better. With FlyBuys, it takes seven years to earn enough for a Virgin Blue Sydney-Melbourne flight, not including taxes and fees, and your points expire after three years. With Everyday Rewards it would take just over three years, again not including the extras.

“Loyalty cards are used to collect enormous amounts of personal data when you do your shopping such as whether you buy anti-cholesterol margarine, prefer organic food or eat certain snack foods,” said CHOICE spokeswoman Elise Davidson.

CHOICE says loyalty schemes can actually cost you money if you consciously or otherwise change your retail behaviour by shopping exclusively at one store as you may miss out on specials in other stores.

“You have to spend a small fortune to get any benefit out of the rewards programs so with returns of less than $1 for every $100 spent, you’re better off by buying one less item, switching to a generic brand or simply shopping at a cheaper store,” said Ms Davidson.

* Roy Morgan Research found the average shopper spent $156 per week in supermarket in the year to July 2009

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