The purpose of loyalty cards?

[dalej42]

Inspired by this thread, I thought I'd ask about the hated loyalty cards that grocery stores use. Is the cost of gathering this information really worth it? How does, "I buy what is on sale." help the store? My Kroger and CVS cards both have my old Ohio information on it, so they're not learning where I live in Dallas. Plus, when I have had roommates in the past, I've often bought stuff for them. I'm sure the vast majority of people fill out all the information correctly for these cards and the demographic information must be valuable to the grocery chain or else these things would have died a quick death. What other purposes do they serve?

[Musicat]

There's a multitude of information that can be gathered from purchases alone that doesn't need the geographic location of the purchaser. For example, if a good price is offered on an item, does it affect the sales of related products? And how much price reduction is necessary to get S sales over T time?

If you can keep track of 100% of the purchases of most store patrons over a long time, there is much data mining that can be done. The demographically-oriented mind boggles.

I don't think those cards are hated as much as you suggest. All of my neighbors have them, and it doesn't seem to bother them in the least. Personally, I feel that they jack up the prices for NON-card carriers, so count me among the haters.

But, I caution, 7 times out of 10, when there is a card-only price offered for a product, there is another, usually a house brand, that is cheaper on an everyday basis. You should never pick up something just because it is shown with a big red "price reduced" sticker. Look around and the "price reduced" item might be the most expensive one on the shelf. Mark my words.

[Shagnasty]

It is also a form of advertisement for the store. You have to carry the card in your wallet, purse, or keychain so you are constantly exposed to their name. Also, there is a theory that you will be more "loyal" to that store once you have their card because you may not have a card for the competition and be less likley to shop with the competition on a whim.

[CynicalGabe]

Originally Posted by Shagnasty

Also, there is a theory that you will be more "loyal" to that store once you have their card because you may not have a card for the competition and be less likley to shop with the competition on a whim.

Suckers. I've got cards for 4 stores in my town.

Safeway
Nugget
Albertson's
and the local Co-Op

[Musicat]

Originally Posted by CynicalGabe

Suckers. I've got cards for 4 stores in my town.

The loyalty concept doesn't work as well when the market is so limited. I have cards for all the supermarkets for a 40-mile radius, too. All both of them.

But I stopped going to one of them when they began carding 80-year olds for liquor purchases and linking the database to driver's license numbers.

[Xema]

Originally Posted by Musicat

For example, if a good price is offered on an item, does it affect the sales of related products? And how much price reduction is necessary to get S sales over T time?

It would seem that a store could get this information without "loyalty" cards - juts by tracking items that are purchased.

[Musicat]

Originally Posted by Xema

It would seem that a store could get this information without "loyalty" cards - juts by tracking items that are purchased.

You're half right. But without linking simultaneous purchases by the same customer, you don't know if one event led to the other. If lemons are reduced, and apple sales go up, did one cause the other? Can't tell. But if most lemon purchasers also bought more apples but non-lemon purchasers did not, there might be a connection.

Without cards, you also can't track purchases over time by the same customer. Example: On checkout, I get a coupon for product X. Did that coupon lead to a subsequent purchase of product X (on the next trip)? If so, the store might issue more of same. If not, try something else.

[Chronos]

But, I caution, 7 times out of 10, when there is a card-only price offered for a product, there is another, usually a house brand, that is cheaper on an everyday basis. You should never pick up something just because it is shown with a big red "price reduced" sticker. Look around and the "price reduced" item might be the most expensive one on the shelf. Mark my words.

This has not been my experience, and I do actively compare prices. In my experience (Albertson's), half of the carded items are store brand in the first place, and when a non-store brand is carded, it's usually cheaper than the equivalent store brand product (if there is one). The only exception I've seen is pop: Name-brand pop goes on sale frequently, but it's never as cheap as the regular price store brand. Even there, though, the store brand sometimes goes on a card sale for even cheaper than usual.

[Musicat]

Chronos, YMMV, of course. My experience is only with Econo Foods and Pick-N-Save, the only two supermarkets near me. But for many years I avoided getting the cards because I was afraid it was too easy to grab the "cents off!" carded-item rather than looking more closely for the best price. Sometimes the savings for avoiding the specials can be dramatic.

And I was annoyed that the savings I actually received was never reflected in the paper tape. Instead, if I purchased a special item, the tape said, "You would have saved $.25 if you had a card!" which is totally bogus since it ignores the savings I got from avoiding some specials.

But now that you questioned it, I'll make a list of 10 items at random at the store the next time I go and post the actual numbers. It should be educational for both of us.

[Sinusoidal Saurus]

I like the cards, and have them for most of the grocery stores in my area. I do "shop the ads," so I don't have any great loyalty to one particular store. I'll go to whichever one has most of what I need on sale. Two observations from my experience:

Safeway actually sends an email every week (to my "commercial junk" address) titled YOUR FAVORITE ITEMS ON SALE AT SAFEWAY. And sure enough, if I bother to look at it, it only lists items and brands that I typically buy. Safeway is clearly using info gained from my use of their card, and using it pretty well.

Another store does have a card-related gimmick that I look forward to. When I shop there, the bottom of my receipt tells me both how much I saved today, and how much I have saved over the course of the year. It's silly, but I love to see that number go up! It doesn't keep me from going to other stores, of course, but it seems to be part of their "brand," and it has obviously worked on me.

[Podkayne]

Don't forget that to get a card, you have to give the store a bunch of information about you. Yeah, they don't know where you live now, but they DO still know that you're a X-year-old male. I just reviewed the application for the card at my friendly local Übermart, and they ask for your age, your income, the ages of your children, if any, your income, whether you're a homeowner or a renter, not to mention your address.

Now, they never bug you to update this information, but for most people it is probably reasonably accurate.

The store can determine things like: After we rearranged the softdrink section, sales of Gatorade to males 15-25 dropped by 7%! Women 30-40 are buying more "wholegrain" products. People with large families buy large quantities of toilet paper when it's on sale.

The can use this information to target their advertising and change their store displays, even how the stores are laid out. They can also take the information to their vendors, and say, "We have the best sales to the mid-to-hi income 45-60 demographic in our area. If you offer us a discount, we can really move your lowfat pate."

[Musicat]

Originally Posted by Podkayne

Don't forget that to get a card, you have to give the store a bunch of information about you. Yeah, they don't know where you live now, but they DO still know that you're a X-year-old male.

Not in my case. They don't have my correct age, name or address. I would have put the wrong sex down too, but I was afraid the clerk might look at me funny.

[Balthisar]

I guess we're lucky -- we don't shop ads, don't clip coupons, and just buy what we need whatever the price is (yeah, this backfires -- I didn't know that for a week in December that tomatoes were $5/lb!).

Plus, at any place that I've been to that uses those nasty cards (Meijer doesn't), they always ask me for my card as if they expect that I have it, and when I tell them I don't have one, they always use the "store card" anyway.

We do use one card, but it's not for discounts. It's for points earning. It's a little, independant grocer in Mexicantown with the best meat and prices that are just excellent anyway (yeah, cheaper than Meijer). This is counterintuitive to me, because usually things in the ghetto or big cities (this is Detroit proper) are pricier.

[mhendo]

Originally Posted by Musicat

Not in my case. They don't have my correct age, name or address. I would have put the wrong sex down too, but I was afraid the clerk might look at me funny.

Ditto.

[Ninja Pizza Guy]

Originally Posted by Musicat

You're half right. But without linking simultaneous purchases by the same customer, you don't know if one event led to the other. If lemons are reduced, and apple sales go up, did one cause the other? Can't tell. But if most lemon purchasers also bought more apples but non-lemon purchasers did not, there might be a connection.

Sure they can tell. Compare it on a reciept by reciept basis. After all, if you bought lemons and apples, they're both on the same reciept.

Originally Posted by Musicat

Without cards, you also can't track purchases over time by the same customer. Example: On checkout, I get a coupon for product X. Did that coupon lead to a subsequent purchase of product X (on the next trip)? If so, the store might issue more of same. If not, try something else.

They can tell this, as well, in aggregate. "Between the dates of XX-YY to YY-XX, we handed out X number of coupons for product Z. Sales of product Z went up 0.01%. During the same period, we also handed out Y number of coupons for product X. Sales of product X went up 25%."

Do they really need to know that you, specifically, bought more product X in a given time?

[Musicat]

Originally Posted by Ninja Pizza Guy

Sure they can tell. Compare it on a reciept by reciept basis. After all, if you bought lemons and apples, they're both on the same reciept.

You're right about a single receipt. But without customer tracking, you lose the link between receipts.

Do they really need to know that you, specifically, bought more product X in a given time?

They don't NEED to know, but they sure WANT to. As to why, we will have to get a Madison Avenue type dude in here or someone more versed in marketing than I to answer that question.

[Gary "Wombat" Robson]

Let me give you a different perspective on the original question. I own a small bookstore, and we're planning to introduce a "frequent buyer" program. Here's why:

First, there are a lot of people who buy from multiple stores. They may buy their specialty books from me, their mass-market paperbacks from the stand at the grocery store, and their hardback bestsellers from Costco. If they have a frequent-buyer card that gives them incentives for purchasing more here, I may be able to get a larger share of their business.

Second, my point-of-sale system can track things like seasonal changes (e.g. things that sell better in June or around Christmas), but the frequent-buyer card tells me more. It helps me figure out what tourists buy vs. what locals buy. It tells me what combinations of things people buy at different times. All of this, in turn, helps me to adjust my inventory. For example, one of my specialties is American Indian books. if I find out that people who buy those also tend to buy mysteries (or whatever), then I'll put those two sections side-by-side and promote them together (and stock more mysteries, too).

Tracking what specific items one specific person buys isn't important to me. It's handy sometimes, when a customer comes in and says, "I special-ordered a book from you last March as a gift for my Dad. I want to get another from the same author. What was that book?" That's more a benefit to the customer than it is to me.

As a small retailer, I don't have the resources for major data mining. I'm a privacy advocate, so I won't be selling the data to anyone else. In a nutshell, I think these cards will help me to sell more books, increase customer loyalty, and tailor my inventory to my customers better.

[Gala Matrix Fire]

I like them. I have them on my keychain. I go jogging with no ID on me, but I carry my keychain. I like to think that if I get assaulted and left for dead on the jogging path, the police will be smart enough to run my grocery store tags through a scanner to find out who I am and where I live. I hope they're smart enough.

[Mr. Blue Sky]

There's a CVS I go to nearly everyday (it's right down from my office). I don't have a card, so the cashier will grab one off a stack and scan it, giving me the "bargain" price on whatever I've purchased that's on sale.

What's the purpose of having the cards if any old schmoe can walk in and get the same deals?

[mhendo]

Originally Posted by Mr. Blue Sky

What's the purpose of having the cards if any old schmoe can walk in and get the same deals?

I'd put the question slightly differently:

Why make your customers go through the hassle and annoyance of filling out forms and carrying around cards in order to get savings that should just be regular markdowns.

There was a time when supermarket sales and specials applied to everyone who happened to be shopping there on that day.

[doreen]

Originally Posted by mhendo

I'd put the question slightly differently:

Why make your customers go through the hassle and annoyance of filling out forms and carrying around cards in order to get savings that should just be regular markdowns.

There was a time when supermarket sales and specials applied to everyone who happened to be shopping there on that day.

Well, the specials did. But the coupons applied only to those who had the coupons, and I've seen supermarkets ' coupons differ between the circular in the newspaper and the ones delivered to my house. The supermarkets that I have cards for haven't gotten rid of specials without either coupon or card- they still have those. They have gotten rid of the "with coupn" specials and substituted "with card".

[lektrikpuke]

As we gently drift more and more toward a cashless society, big brother becomes more and more entangled in our everyday lives, computers and home devices become more and more connected, etc., etc., (can someone say 666) these cards will probably fade from everydad use. I mean, really, once they implant the chip (or whatever they'll use) in your right hand or forehead, why will they need cards? No, really!?!

[lektrikpuke]

every day use

and I was doing so well on my soap box

[AskNott]

I suppose the drugstore would like for me to buy the Big Brand. Or maybe not. Often, there is a flashy sign on the shelf pointing out how much cheaper the house brand is. The card gets me an automatic discount on all house brand products.

At the grocery, my register tape usually tells me I saved $5 or more with my card (today, on a one-bag trip, I spent $21.58 on produce, yeast, yogurt, and beer. There's no discount on the beer, but the card saved me $2.23.) I could keep my information secret from them, for 5 bucks a trip. I could, but I'd be a sucker to do so. Yes, they can do targeted selling. If I buy Goombatz pasta sauce, the register spits out a coupon for the next bottle. That's okay by me. I don't really see a big downside in it.

[Excalibre]

I've read that it's a form of price discrimination. For folks who care, and scout out sales, and look at ad circulars, naturally, having stuff marked down increases sales. On the other hand, for customers who don't know and don't care, the ones who don't clip coupons and just shop where it's convenient, and who wouldn't tailor their shopping to the sales anyway, don't have to get the savings. It allows the store to charge two different prices for the same item - one price to those who are willing to pay the full price, and one for those who only want it if it's on sale.

This doesn't need demographic data at all, but it's defeated if the cashier scans the store card. When I worked at a grocery store, they discouraged us from doing that.

[commasense]

Here's the best case I've found against loyalty cards: CASPIAN.

Among my reasons for hating loyalty cards (supporting cites can be found at the link above):

Even with the "discounts," stores with card programs have higher prices than stores without them. Think about it: the computers and administration of the systems cost them millions. They pass these costs onto us.

Big Brother. I believe the Caspian site has a report on a store chain that, shortly after 9/11, without being asked, and without any permission from customers, just handed a huge amount of purchase data over to the government, thinking it might help "catch the terrorists." Even without appalling cases like that, the fact that such enormous amounts of data are being collected is a privacy abuse just waiting to happen.

It's just none of their damn business what I buy. (I have several cards, but they don't have my real information. Of course, this means I can only buy with cash, which is sometimes inconvenient.)

I'm frankly appalled at how blandly most people accept this prying into their personal lives and buy the lie that the cards "save" them money.

[butter pie]

I ran across the CASPIAN site a long time ago, and used to do the cards with-fake-info, but now I just vote with my $$ and refuse to shop anywhere that uses them except when it's some kind of emergency. Sometimes that means going to the Great Satan Wal-Mart grocery, but life is all about compromises. I don't want to see a day where to get the cheap prices, you pretty much HAVE to give the stores all your personal info because ALL the stores use the cards. And there's nothing stopping them from starting to require they verify the info with your ID, or whatever, when you get the cards.

It's not even so much that I mind them tracking the buying info for their stock or ordering purposes, I just don't think you should be able to use prices to essentially extort personal information out of your customers. Everyone has to eat... if all the stores started doing this and I didn't want to participate, I'd be out of luck. There's a pit thread going on about Best Buy asking why the flaming-blue-hootie they want to know your phone number when you check out; I'd be curious how many people are up in arms about Best Buy asking for personal info, who also use the frequent shopper cards.

I already had to get one for PetSmart, the only one I have. I used to shop there instead of PetCo because they didn't use the cards, but then PS started getting them. Unfortunately those are the only two games in town where I can get my pet supplies since I don't have the stereotypical cat/dog/bird, so like my grocery store example above -- if I want the cheaper prices, I pretty much have no choice. And the prices have not gone down one bit since I got the card. Other people that worked at the store indicated that they raised their prices slightly to encourage people to get the cards. Feh.

[Gary "Wombat" Robson]

Originally Posted by commasense

Among my reasons for hating loyalty cards...

Specifically, your reasons for hating supermarket purchase tracking cards. I didn't see a single argument there against the type of loyalty card I was talking about for a small store (see my earlier post in this thread).

If I go ahead with my loyalty card program, I don't even care if I have your real information on the card, and I'm certainly not going to be raising any prices. The equipment doesn't cost me "millions" (in fact, it's built into the point-of-sale system I purchased last year for $5,000). All I want to do is encourage customers to buy more at my store.

Some of the rabid anti-loyalty-card posts in this thread have me worried. Do you just hate supermarkets, or would you really stop buying from a neighborhood store if they implemented cards like I described (buy $X, get a discount on your next purchase)?

[butter pie]

Originally Posted by InvisibleWombat

Some of the rabid anti-loyalty-card posts in this thread have me worried. Do you just hate supermarkets, or would you really stop buying from a neighborhood store if they implemented cards like I described (buy $X, get a discount on your next purchase)?

Marble Slab Ice Cream gives me a little cardboard card the size of a business card, and when I buy an ice cream, I get a stamp. Five ice creams, I get one free!

I like those. Free ice cream == teh awesome. People pay the same whether or not I get the card, but I get rewarded for going there five times. The type of shopper cards I was referring two are the ones that create two-tiered price structures and impose a penalty on those who choose not to participate.

I don't like any frequent shopper cards that require the giving of personal identification, including even if I have the option to give you fake info. If you don't need the info then just give them a piece of paper with an ID# or something.

[0x1A4]

I'm not a fan of all the personal info that's being kept on us all, either. I know it's I'm not a fan of all the personal info that's being kept on us all, either. I know it's inevitable that it's going to happen, and get a lot worse. But I fight it all the time. Even when they ask for my zip at the register, I give them 99752, which is a bank of PO boxes above the artic circle in Alaska. Sometimes the cashier will get the joke.

[muttrox]

Please check out http://www.dbmarketing.com/ I am just changed jobs to be the exact kind of marketer who would like to do a loyalty program, this guys books and such are a terrific introduction to the topic, and most of it is right on the website.

The short answer to the OP is that it makes money for the store, why else would you do it?

[Chronos]

I ran across the CASPIAN site a long time ago, and used to do the cards with-fake-info, but now I just vote with my $$ and refuse to shop anywhere that uses them except when it's some kind of emergency.

You can vote with your $$ at any store, regardless of whether they have cards. If every grocery store in your city went to cards, you'd still be free to go to one of them and not get a card. Yes, you'd pay more than if you had the card. That's your decision, whether your privacy is valuable enough to you to justify the extra cost. But you do still have that option.

[voltaire]

(typed out a whole post that got poofed thanks to that annoying little "back" button that I never intentionally use on the top of my "multimedia/internet" keyboard. BUGGER! I'm gonna pry that sucker out one day. The similar button on my mouse that is also prone to this will be next!!!11)

[partial-disclosure] (hey, I signed a non-disclosure agreement)
I work for a company that provides loyalty card systems to (mostly) grocery stores. <puts up arms to block blows>

The truth is that most traditional grocery stores out there are at war with Wal-mart/Sams, Costco, BJ's, etc. They're trying everything they can to compete and loyalty card systems are a good way for a merchant to do that.

The retail grocery business is NOT like most other retail businesses. Their sales volumes are HUGE, but their markup and thus profit margins are miniscule compared to most other retail businesses. I think that a lot of people have the false impression that their local grocer is making a mint off of their $200 basket full of grocery puchases. They aren't. It's nothing like the profit margin of most other retail where you can expect to pay around double what the retailer paid for the item.

A loyalty card program allows a retailer to segment (or categorize) shoppers based on their previous purchases. (I'm not going into all the details, and it's not my expertise anyway, but I'll just discuss the extremes) At one end of the segment spectrum is their goal for all shoppers, the "loyal" shopper. At the other end is the grocer's bane, the "cherry-picker."

The loyal shopper is someone who shops at the store regularly and buys many different products from many departments. They buy certain items regularly, they try new products occasionally, and they also sometimes take advantage of specials. In general, they regularly buy A LOT of stuff and are a very good customer. Losing this customer to a competitor would be bad, specially to that Wal-Mart that just opened up down the street. If the store is able to stock the types of items that the loyal shopper wants to buy, and they regularly target them with attractive specials on those items, their chances of keeping them as a loyal shopper improve greatly.

The cherry-picker is someone who regularly shops elsewhere, but only comes to your store for a few items, often just the specials and nothing else. Before the loyalty card system, the store might have offered certain specials with a limit per-person. This type of shopper would often find ways around the limit and send in each of their family members to buy as many as possible. With the loyalty card system, the store can now more easily prevent this type of abuse and allow more of their loyal and profitable customers to benefit from these specials. The store can also target specific promotions towards these cherry-picker type shoppers to attempt to eventually turn them into loyal shoppers.

When used correctly, a loyalty card system can and often does significantly increase sales AND profit margin at the same time. In the retail supermarket business a 1% increase can be huge and can often be the difference between success and failure.

I find that there are a lot of people who are strongly against cards at their local grocery store, but who have no problem with the REQUIRED "membership" you have to pay for to buy items from places like Sams/Costco/BJ's. The wholesale membership clubs are a big part of the competition that the grocery stores are attempting to deal with when they decide to adopt OPTIONAL loyalty card programs. You can't really blame them for wanting to somewhat level the playing field.

IMO: These days there are many other businesses that have all of the identifying information for each of their customers. I think there should be strong privacy laws that protect personal information from being used improperly. But I can't understand the apparent contradictions in where people sometimes choose to draw the lines.

[fighting ignorant]

[stupid]Sorry, I just read the OP as "The price of loyalty cards". Sounded much more dramatic that way[/stupid]

[butter pie]

Originally Posted by Chronos

You can vote with your $$ at any store, regardless of whether they have cards. If every grocery store in your city went to cards, you'd still be free to go to one of them and not get a card. Yes, you'd pay more than if you had the card. That's your decision, whether your privacy is valuable enough to you to justify the extra cost. But you do still have that option.

That's what I do when I HAVE to stop in a store that uses cards for some reason. But I only do that in an emergency as I don't have money to just be wasting willy nilly and I would rather not support stores that use cards by giving them my money AT ALL. If I go there an refuse to use the card on principle and pay more, they still win. The only way they lose is if I don't give them money at all.

[Peyton Farquhar]

I have cards for all the local supermarket/drug store-type places. It was embarrassing to me to hand the cashiers my keychain with all their competitors' cards hanging as well so I now carry four sets of keys around.

[Voyager]

Originally Posted by jinwicked

I ran across the CASPIAN site a long time ago, and used to do the cards with-fake-info, but now I just vote with my $$ and refuse to shop anywhere that uses them except when it's some kind of emergency. Sometimes that means going to the Great Satan Wal-Mart grocery, but life is all about compromises. I don't want to see a day where to get the cheap prices, you pretty much HAVE to give the stores all your personal info because ALL the stores use the cards. And there's nothing stopping them from starting to require they verify the info with your ID, or whatever, when you get the cards.

I hope you pay cash at Wal-Mart. If they don't use credit cards for data mining, I'm sure they will someday. WalMart tracks everything really closely. Me, I'd rather go to a supermarket where they pay their workers a living wage and benefits.

I don't see how anyone thinks the prices are jacked up with the cards. They replace the store coupons they used to have. (You still get to use manufacturer's coupons in the Sunday paper.) We have a Safeway and Albertson's with cards, and a Raley's without, and the Raley's is no cheaper.

There are a couple of other benefits of cards. Safeway is giving United Airlines miles with purchases. They track certain things, like sandwich purchases, and you get a free one every so often. And they sometimes print out useful coupons based on your purchase history.

One more thing - if using the cards lets the stores make purchases and stock items more efficiently, with less waste, it will save us all money and result in less food being discarded. Works for me.

[butter pie]

Originally Posted by Voyager

I hope you pay cash at Wal-Mart. If they don't use credit cards for data mining, I'm sure they will someday. WalMart tracks everything really closely. Me, I'd rather go to a supermarket where they pay their workers a living wage and benefits.

Walmart, AFAIK, isn't making me give them my home address and stuff to use a credit card. I don't care that they track data (I can see the usefullness of that for both the store and the customer) but as someone else mentioned, they don't need my home address or phone number to do that. The grocery stores essentially force you to give them your personal info in order to get the cheaper prices. And there's nothing stopping them from requiring you to show ID to get the cards at some point in the future, so giving them fake info isn't really solving anything.

The credit card isn't the same anyway, because I'm trading off a bit of personal identification for convenience. The grocery stores jack up their prices, then penalize you if you don't give them your info, by making you pay more. The cards aren't a convenience for me, they're a gimmick to help the store.

And I do avoid regular WalMart as much as possible, but I don't have the luxury of shopping at the more expensive places when I can get a fully 1/3rd more food in the generic store brands at the Neighbourhood Market. That's like an extra 1-2 weeks of food for me, for the same price.

[cantara]

This seem slike a hijack after reading the answers above (although I have to echo what voyager said).

Outside of the customer tracking and data mining, the customer who has the cards and is shopping for the specials will frequently purchase other items as well. Obviously the items that are not on sale at the time have a better profit margin and the store would look to maximize that. Getting them in the door is the first step.

I would classify my wife as a 'cherry picker' as she will scan the ads and buy the sale items at a number of different stores during the week to save the money. Left to my own devices, I would probably choose the store that has most of the items that I am looking for to do all of my shopping. That said, having a loyalty card would cause me to consider that store first. Case in point: Shoppers Drug Mart. We have a loyalty card there and rarely purchase drugs and toiletries from anywhere else thanks to the 'points earned' that can be redeemed.

[David Simmons]

The cards don't do anything to benefit me. Before Albertson's went to cards their sale prices without the need for a card were the same as the card price is with cards. If they exist and don't benefit the customer then they must benefit Albertson's. I don't object to this if the company uses them to hold down operating costs and thus prices. However I'm not sure any reduction in operating cost is being passed on.

[Musicat]

Originally Posted by cantara

Case in point: Shoppers Drug Mart. We have a loyalty card there and rarely purchase drugs and toiletries from anywhere else thanks to the 'points earned' that can be redeemed.

Pretty much the same kind of shopping that Green Stamps once encouraged. Anyone remember stamps? They were the loyalty cards of their day.

[gazpacho]

Originally Posted by Peyton Farquhar

I have cards for all the local supermarket/drug store-type places. It was embarrassing to me to hand the cashiers my keychain with all their competitors' cards hanging as well so I now carry four sets of keys around.

Me thinks you worry over much about offending.

[commasense]

Originally Posted by Musicat

Anyone remember stamps? They were the loyalty cards of their day.

No they weren't, because they didn't ask you for personally identifiable information to get them, and charge you more for your groceries if you didn't use them. Yes, they were a loyalty program, in that they hoped the benefit of the stamps would make you choose that store rather than another, but they don't compare at all to today's extortion cards.

[a pirahna brother]

Posted by Voyager

One more thing - if using the cards lets the stores make purchases and stock items more efficiently, with less waste, it will save us all money and result in less food being discarded. Works for me.

The stores could do this already without a "loyalty" card system, all they would have to do is mine the sales data and see what products they are selling the most of certain days of the week.
Some stores track their sales this way for the reasons you noted above, and I believe Wal-Mart is considered to have the best system in this regard, but WM doesn't require cards. Even my small local gorcery store near the house, that still prices a lot of items with tags, has a reasonably good idea of how much milk they will sell every week, and they don't use cards

What the cards allow the stores to do is pin the purchase data to a particular shopper at a particular time, it is far more useful from the store's perspective to know that a 35 year old white man buys a product every Thursday, versus knowing you sold that product on Thursday.

[iamthewalrus(:3=]

You could do what I do, which is to just get a new card every time I go in. If there's a line, they just give you the card and the pamphlet to fill out later. I use the card and then throw both in the trash on the way out. Another favorite is to take advantage of the fact that they'll let you key the card to your phone number. I just register a card with the phone number (xxx) 867-5309 wherever I go because it's memorable. We should all just use that number.

Yeah, if I use my CC, they can probably link my many cards together that way, but I still have hopes that somewhere there's a badly-coded database that my dozens of loyalty card numbers will bring down.

And to the small bookshop owner: I love loyalty cards like that.

[rjung]

The only place I use my "loyalty card" regularly is at Ralphs Supermarket, and the only stuff I buy there is milk, cereal, and feminine hygene pads (for the wife, natch).

I can't imagine what the data miners make of that.

[AskNott]

Originally Posted by Peyton Farquhar

I have cards for all the local supermarket/drug store-type places. It was embarrassing to me to hand the cashiers my keychain with all their competitors' cards hanging as well so I now carry four sets of keys around.

They don't mind at all. In fact, they're delighted that, out of those stores, you chose to shop at theirs.

Make sure you use the right one, though. One of our local cards scans as a unit of merchandise at one other store.

[Mr. Slant]

Originally Posted by AskNott

I suppose the drugstore would like for me to buy the Big Brand. Or maybe not. Often, there is a flashy sign on the shelf pointing out how much cheaper the house brand is. The card gets me an automatic discount on all house brand products.

SNIP

I've done some basic research on this, and I'll hazard my speculation that if a grocery vendor like Kroger or another one of the giants that has their own dairies, lines of generics, etc has the choice of selling you their brand or a pricy name brand, they'd rather sell you one of their house brands ANY DAY.
Name brands are pricy for you, but pricy for them.
Once the price of advertising is removed, it becomes possible for a large grocery chain to actually sell you a product of equivalent quality to the highest quality name brand at a 10% savings to you while simultaneously tripling their per-unit profits.
In the case of Kroger, they have 3 different generic product lines at various price points. One of the house brands is cheap, one comes in at a medium quality level, and their highest-quality generic is commonly as good if not better than the premium competitors.
Sorry for the hi-jack.

[Sleel]

What's really annoying about loyalty cards is, as someone pointed out earlier, the fact that they ask you for non-demographic information. They don't need your address and phone number and they don't need your name. I imagine they want that information so that they can send you advertisements to induce you to come to the store, but they already send that stuff out to all potential customers in the area. I can't see any benefit for the customer in providing contact information.

Many people dislike providing this information for both emotional and logical reasons. You can get to know the proprietor of a small business personally. You can form a personal impression or bond with that person. That person can be personally held responsible for transgressions. An organization does not provide the same opportunities. You might like the manager of the store, but he or she is not the person ultimately responsible for upholding your trust. People make decisions of trust based on reason and intangibles. Trust is always risky and people prefer to manage their risk by making sure that when they trust they have the best information available for making the decision. Supermarkets and big business conglomerates are unavoidably faceless, unaccountable, and therefore untrustworthy.

I would have no problem with providing valid demographic information like gender, age, income bracket, and even general geographic area if identifying information wasn't also included. Demographic info all they need for good data tracking and targeting sales and that's all they really should be asking for. Asking for more is beyond the bounds of my trust, and obviously beyond the bounds of others in this thread too.

InvisibleWombat: I think that using information to improve your business and improve service for the customer is a good reason for using a system that tracks customer purchases. But you don't need to have identifying information to track the purchase information you're likely to want. In setting up a database you're going to have to have a unique identifier for each customer. It's easier, faster, and gives less chance of a conflict if you have an automatically generated ID number for each customer. After all, you could have several customers from one household with very different tastes in books. Using a phone number or address as the ID number would not allow you to separate their purchases.

If you do ask for contact information, I suggest that you give both a reason for asking and provide a benefit to the customers for doing so. As a small business, you probably can't afford the mass-mailings that most supermarket chains use, which provides you with a valid reason for asking for it. You could tell your customers that they can receive information about sales, special events, book signings, etc. if they provide the information. You could also give special discounts (maybe a one-time deal, maybe continuing small discounts) if they do so. As long as it is a mutually beneficial exchange, people are more likely to provide the information you ask for. However, unless you really need detailed information it might be a good idea to avoid asking for it.

You can also get some of the same benefits for yourself by point-of-sale tracking. You mentioned that you want to compare purchases by locals to those of tourists. You could make a simple database that correlates purchase information with geographic area. Zip codes are simple, fast, and general enough that most people will not be too leery of providing it. You should explain why you are requesting the information. Give them reasons to do it, provide some benefit to them, and above all give them reasons to trust you and you should have few problems.

[Balthisar]

Hmmm... I think the Soriana here may be doing the card the "right" way -- the first time I shopped there, they asked if I had a card, and I told them "no." I reconsidered my normal aversion, though -- this is Mexico; I can give stupid information. So I asked for an application and the cashier just looked at me like I was stupid, and just gave me the card outright.

I'm still not sure what it's for, though. I don't think it's for discounts, but then yeah, maybe. ::shrug::