Consumer group takes swipe at supermarket loyalty cards

Posted by Isobel Drake on 1st February 2010

Analysis of supermarkets’ loyalty schemes by consumer group Choice has questioned the merits of rewards programs for shoppers, arguing that most will have to wait a long time before receiving any real benefits.
The consumer group argues that 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, the consumer group said, 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.

“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,” Choice spokeswoman Elise Davidson noted.”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.”