Am I the only one troubled by so-called loyalty cards — those wallet-fattening, discount-generating, grocery store-checkout minor irritants? When the cards were first introduced at my local Safeway I was urged to sign up, with the slogan, “The savings are in the card!”
Well, I was skeptical, but I decided to look into it. Right from the start, I was turned off by the information required on the application. It also seemed to me that — as The Economist pointed out in its November 5 issue — the expense of setting up and running rewards programs increases a retailer’s overhead. So I asked the attendant (usually busy manning a checkout till, but now temporarily signing up rewards card customers instead) how increased overhead could generate discounts?She stared at me blankly.
One chief executive from a Canadian firm that runs a card scheme explains, “The real value-added (from loyalty cards) is the data.” As The Economist further elaborates, “By cleverly using the information collected when customers’ cards are swiped at checkouts, the companies can offer them well-targeted discounts. Even small shifts in buying habits, multiplied by very large numbers of customers, can provide a welcome boost to profits.”
I’m not convinced. And neither is Wal-Mart, the world’s largest retailer, which proclaims (through Asda, its British subsidiary): “No Clubcard. No gimmicks. Just lower prices every day.”
Unwilling to sign up at Safeway, I switched to buying groceries at Albertson’s, which at the time had no loyalty cards. But it wasn’t long before both Albertson’s and Fry’s (Kroger’s) — the only other alternatives in Prescott, my home town — also jumped on the bandwagon. What to do?
Club cards come in two forms: a credit card-sized rendition and a key chain-tag mini-card. One day, through sheer luck, I found a dropped mini-card in the Albertson’s parking lot. Voila! Now I could cash in on discounts without revealing personal information.
On my next trip to the grocery store, my favorite checkout gal noticed I’d acquired a loyalty card. She kidded me about capitulating. I told her I’d found the card. So she asked me what the big deal was. I told her I was very skeptical about the whole card concept, explaining that I couldn’t understand how additional overhead could generate discounts, and that I objected to providing personal data and purchasing habits. I summed it up by saying, “Adolf Hitler would have loved to find out who was buying kosher food.”
She responded diplomatically: “I never thought of it that way.”
Then, just as suddenly as it had adopted them, Albertson’s dropped its loyalty card program in Arizona. However, they continue the scheme in Nevada — a sure sign of corporate ambivalence.
Somewhat defeating the purpose of the program is another fast-spreading policy among card issuers: complementary card swiping. Many chains, including ones in Canada, now authorize checkout attendants to swipe loyalty cards for tourists, visitors, and folks who forget their card. All a customer needs to do is ask.
When Wal-Mart finally opened up a supercenter in Prescott, it was a mixed blessing. The city council threatened to use eminent domain to evict recalcitrant lease holders from their property to make room for the Wal-Mart. One council member condemned the abuse of eminent domain but justified the council’s actions by rationalizing that eminent domain would not actually be used — just threatened.
But that’s another story. At least now Prescott has some card-free choices.