Look for discounts, not points!

18/12/2014 18:16

Just how much are you getting from your loyalty rewards programme?

The Consumer Council of Fiji is advising consumers not to be blinded by the glitter of loyalty points as they select their purchases or plan their shopping for this Christmas. Instead, consumers should look for authentic discounts.

The Council’s survey of three major loyalty programmes (Tappoos Frequent Shopper (TFS), Jack’s Reward Club and Prouds Privilege Card) has revealed that consumers don’t get much in terms of redemption value.

The assessment of the loyalty/rewards programmes disclosed that these programs offer such poor rewards where loyal customers generally save less than a dollar per $100 spent. On the other hand retailers gain valuable information about consumers shopping habits.The Council has found that the redemption rates of loyalty programmes are very low compared to discounts offered by retailers.

The Council’s survey revealed the following:

  • Earning points – Tappoos and Prouds give 1 point per dollar on consumers’ purchase amount while Jack’s gives 1 point on every $4 spent.
  • Redeeming Points: When we looked at what consumers will get in dollar value for redeeming points, we found that if a customer spends $2000 he/she will be able to redeem items worth approximately $25 at Tappoos which comes to a saving of $1 per $80 spent. Whereas at Jack’s the consumer has to spend $2400 to receive $25 worth of items through redemption - ie a dollar is saved after spending $96. Prouds will give items worth $15 for spending $2000 which comes to a saving of $1 per $133 spent.

Similarly, spending $5000 will entitle a consumer to redeem items worth $62.50 at Tappoos and $50 at Prouds, though Jack’s is ahead of Prouds by a nose, awarding $50 for$4800 spent. Tappoos and Prouds will allow a consumer who has 10,000 points to redeem items worth $125 while Jack’s gives a $100 redemption value on any item.

Loyalty cards holders can benefit in some cases where they may be given preferential discount offers or double points compared to ordinary consumers. However, consumers need to weigh loyalty programmes carefully. A consumer can get a better deal simply by comparison shopping rather than believing that he/she will receive a better deal through loyalty programmes. As we said, the redemption rates of loyalty cards are very low and it is not designed for quick or instant benefits and returns to consumers.

There are retailers offering instant savings or deals from which one can reap immediate benefit unlike reward/loyalty programme that take time to be realized.Consumers are urged to demand information and disclosure of full terms and conditions of loyalty programmes. While some information is available in brochures and online, retailers are also urged to disclose full terms and conditions and helpful information for consumers to make informed choices.