The Truth about Loyalty Programs

When shopping at your local mall you are bound to be offered a loyalty or benefit card by several of the retailers like Edcon with their Thank You Card and Pick Pay with the Smart Shopper Card. If you are like me, your wallet or purse is probably bursting at the seams just holding the cards that you already have. So, should we really bother with another one? Are these programs of any real value to us or just something to hook us into more spending?

To determine their value, you need to understand why stores offer such programs, keeping in mind they are not in the business of giving money away. As a retailer, if you do not have an account option linking you to your purchases, there is no way of knowing who your shoppers are, what they like or if they are loyal to you as a brand. You will only have loads of transactions that indicate what is purchased, but you won’t know who the buyer is and what products they may want to buy in future.

Loyalty program are implemented so that retailers can get closer to their customers, and yes, so they can get them spending more. A good loyalty program should be simple and leave you with real time, real value, real savings, benefits or cash-back that does not leave you with a sour taste in your mouth. Who doesn’t want to get money back, two for one offers, exclusive discounts and vouchers? The main question, however, is at what cost?

Some things to consider when you join a program:

• Do I have to pay a joining fee?
• What annual fees are charged, if any?
• How easy is it to redeem my points or use my cash earned?
• Can I use my benefits at more than one partner?
• If it sounds too good to be true it probably is.

Many programs offered at a fee offer great value, but only if you use them. If you are not going to use that gym benefit, just know you are funding someone else’s visits. Being a part of a loyalty program in the hope that you’ll one day move up a level and get that discount for a hotel or airline is a waste of money.

I know of many people saving hundreds or even thousands of Rands monthly by taking full advantage of benefits offered. If you understand how the program works and it’s simple to use, don’t be afraid to take out the card and swipe it to earn yourself some perks. As our local retailers follow in the footsteps of their American and British counterparts, you can expect a lot more competition to get you to spend in their stores and with competition come better prices benefits and rewards. To save daily, you should be making informed purchasing decisions, using your benefit options and your cash-back cards to get the most out of the programs.But most of all, continue asking yourself before you buy, do I really need this?

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