We Know Better, But Still We Love Loyalty Cards


As we've been discussing on the message board on yesterday's post, Color Me Stupid About Customer Loyalty, giving up our personal data to participate in a customer loyalty card program often isn't the wisest move.

Unfortunately, we're not always at our smartest when in the throes of shopping.

As I mentioned in my blog, the other night I coughed up some personal information to get a loyalty card from a beauty retailer. I'd like to think the request caught me at a weak moment, when I was too tired to think rationally. But truth be told, I have a number of such cards in my wallet -- a couple from nearby grocery stores and others from specialty retailers. Will I ever wise up?

I'd like to be able answer that question with a definitive "YES!" But if I'm being honest, a "probably not" is more likely the answer -- especially since part of me thinks that the damage already has been done. I guess I'll take solace in the fact that I'm not alone. Recent research from SAS (this site's sponsor) and Conlumino, a retail research agency and consulting firm, tells me so.

For the study, "Retail Loyalty and the Consumer," SAS and Conlumino surveyed 2,109 consumers and 100 UK retailers. What they learned is as apropos to what's happening in the US as it is globally, as well as across industries, Wilson Raj, global marketing director of customer intelligence at SAS, told me in a phone interview. And that's this: Just shy of 95 percent of the consumers surveyed said they own at least one loyalty card, with the greatest number of respondents -- 23.4 percent -- owning three.

This isn't a case of sign up and forget, either. At survey time, most consumers said they'd used a loyalty card within the last few days. More than 25 percent had even used one that very day, and 88.2 percent said they use them regularly.

Any shopper knows that retail loyalty cards are ubiquitous, but just how popular they are and how widely used took Neil Saunders, managing director at Conlumino, by surprise. He attributed the high usage rates, in part, to the continued weak economy. "They'll give up their data, and share some information, to get money off," he told me in a separate interview.

What consumers most want out of a loyalty program is pretty simple, the survey showed. They want coupons, those no-brainer ways of saving money. Nearly three quarters of respondents identified coupons as most important to them. On-the-spot discounts and special offers for use at a later date also bubbled to the top of the list -- although at 41.5 percent and 36.4 percent, respectively, a far cry from the 74.1 percent of love going toward coupons.

The survey clearly showed that people have become so used to loyalty card programs that participation has become a non-issue for many of them, Saunders said. Nearly half of respondents -- 46.8 percent -- showed no concern whatsoever about signing up for a loyalty card. Those who did have some niggling doubts broke down along these lines:

  • 34.4 percent worry most about retailers sharing personal information with other companies
  • 27.4 percent fret over receiving unsolicited marketing material or advertising
  • 23.4 percent don't like not knowing how their purchase information might be used
  • 18.7 percent think retailers might know too much about their purchases
  • 14.1 percent worry that signing up will mean they will receive too many letters or emails from the retailer

To this latter point, consider, too, that the research shows nearly 40 percent of respondents are OK with opting in to receive marketing material -- but not via text message. Only two percent said they're ready to receive marketing promo via that most modern of means, but give them a year and we might see this change considerably. Thirty percent of the consumers surveyed admitted that they'd be "fairly or highly likely to take advantage of a relevant offer direct to a mobile phone while they’re in store."

Shoppers want deals, and figure that trading off some basic facts about themselves is worth getting that 20 percent off coupon to buy themselves a little something special on their birthdays. The promise of value pricing, it seems, might not carry enough sway over consumers who have come to associate discounts with loyalty cards.

So do share -- how many loyalty cards do you have in your wallet? And what's been your criteria for signing up for one? Let's talk about this on the message board below... but first, I'm running out for a lunchtime errand. I need some bread and butter, and since I'm just $43.12 shy of reaching the $650 spending target that's gonna get me a one percent reward discount for my qualified purchases, maybe I'll pick up a few other items as well!

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Beth Schultz, Editor in Chief

Beth Schultz has more than two decades of experience as an IT writer and editor.  Most recently, she brought her expertise to bear writing thought-provoking editorial and marketing materials on a variety of technology topics for leading IT publications and industry players.  Previously, she oversaw multimedia content development, writing and editing for special feature packages at Network World. In particular, she focused on advanced IT technology and its impact on business users and in so doing became a thought leader on the revolutionary changes remaking the corporate datacenter and enterprise IT architecture. Beth has a keen ability to identify business and technology trends, developing expertise through in-depth analysis and early adopter case studies. Over the years, she has earned more than a dozen national and regional editorial excellence awards for special issues from American Business Media, American Society of Business Press Editors, Folio.net, and others.

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Hate them
  • 9/25/2013 2:12:14 PM
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Personally I hate these cards, not because I give up info, but because they take up too much space in my wallet. I am looking forward to a digital verson I can keep on my phone and the shop can just scan the QR code. 

Re: Hate them
  • 9/25/2013 2:47:52 PM
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I agree. CVS, for instance, will let you give a phone number instead of your card - but you can't access the instore coupons (in a kiosk) without the card. Very frustrating.

Re: Hate them
  • 9/25/2013 2:49:37 PM
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My objection at CVS are those mile-long receipts that using a loyalty card generates. Why can't the offers just be stored with your account and accessed automatically when you check out?

Re: Hate them
  • 9/25/2013 2:54:50 PM
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@TalkerZ that's been a point of contention for a long time. In the past, they have said, CVS  has claimed that customers like having the paper coupons, but now they have finally agreed to shorten them 25%.see http://www.bostonglobe.com/business/2013/08/30/long-cvs-receipts-spark-social-media-sensation/VzQeVzNmBB3ECqy6vQtj1N/story.html) They have recently started emailing customers, and so they've been trying to get more email addresses from people coming into the store. I heard some cashiers discussing how many they managed to get that day. Perhaps they were promised some kind of incentive payment for it. 

Re: Hate them
  • 9/25/2013 3:15:20 PM
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Ah, but the ones I use most often -- for the grocery store -- don't require the physical card in hand. All you have to do is enter your phone number at the point-of-sale system. Alternatively, some stores offer the cards in mini versions you can slip onto a keychain. Those can come in handy, too.

The rich get richer
  • 9/25/2013 4:17:02 PM
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Yeah, my keychain is silly.  I have Starbucks, Qdoba and Giant Eagle (local grocery) on there.  Giant Eagle does a cool thing with GetGo gas stations. Buy food here and earn discounts on gas.  Though I almost lost my mind when the power went out while I'm filling up at 3.07 a gallon the other day.  Kid comes out and says he can discount me.  

 

What does my subject have to do with all this?  Well, nevermind the whole incident makes my kid late for karate and she has to do pushups for being late.  But then a kid whose rich daddy I used to work for pulls up in his new porshe while I'm stressing over my .40 per gallon.  Sorry for the whining but what are the odds?  Predict that!

Re: Hate them
  • 9/25/2013 11:21:27 PM
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Hmm... let's make that list of loyalty cards. I have a few I like to use. I tend to decline signing up for new programs. Walgreen's is the newest program I joined.

Walgreen's Balance Rewards - I noticed retail prices on some items spike in the last two months. I blame the loyalty promotions.

GameStop - We seem to only buy used video games (a couple times a year). Buy 2, Get 1 free covers that. The cost of the pro card is easily saved in one trip.

MyCokeRewards - I've been a member since 2007 and gotten magazine subscriptions and t-shirts.

Carino's Pasta Points - I like getting free food with this program.

Papa John's pizza rewards - more free food here 

 

Re: Hate them
  • 9/26/2013 3:42:10 AM
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@Beth, 

I dislike the keychain version of the cards just as much. the realestate in my pockets is at a premium. I like to keep as few keys on my key ring as possible. normally just two, and I am working on dropping that number to just one. ;-) soon enough I will just have to carry my phone, or so I hope. 

Re: Hate them
  • 9/26/2013 7:11:12 AM
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So let's hope you never lose that phone!

Re: Hate them
  • 9/26/2013 7:20:25 AM
NO RATINGS

Besides my grocery store cards (Dominick's & Mariano's), I really like the Target red debit card, with an automatic 5 percent off purchases. It's nice knowing that I'm getting a slight savings on anything I buy there, since I'd most likely be buying it there anyways. I also like programs that provide free shipping, as does the red card, too.

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