The guy was saying that he has a **membership card **from COSTCO.
Personally, I really dislike giving my information out. The government is bad enough, but why give it to a retail outlet? I also bristle at being a “member” of anything. I don’t want to join, register or belong. Anonymity is my spiritual foundation.
Sam’s Club charges their members an annual fee. To go to their store. To spend money.:dubious: Then there are different levels of cards and on and on.
Why does Sam’s Club, COSTCO, METRO (from Germany) and these other stores do this? Is it all about tracking what people buy? Wouldn’t an easier way to do this is to just see what is selling from their stock and what isn’t?
Isn’t it kind of asinine to pay a store a cover charge for the right to give them more money by buying something? Is the place so much cheaper? Why go there? There are many places that sell groceries and lots of places sell TV’s and appliances.
Secondly…
The supermarket shopping cards. Most supermarkets have these and they are now worldwide. I really dislike these cards. I think they are a waste and an inconvenience and it slows the line down at checkout. Casinos and hotels also use these cards. Whoever invented these things needs a swift kick in the ass.
I like this website. http://www.nocards.org/
Warehouse stores have a particular business model; they sell the products at a pretty much break even price, and make all their profit from the sales of membership cards. The reason people buy these cards is because the products within are cheap enough to make up for the cost of membership. And the products come in bulk sizes, which are well suited for small businesses and large families.
Well, in the case of Sam’s and Costco, your paying membership allows you to shop there, where in turn, they have really good prices on everything they sell (often better than anywhere else) as well as the fact that they have bulk items that you cannot buy elsewhere.
As for the grocery stores, I like those cards. Every $100 I spend at Kroger’s I accumulate a 10 cent per gallon discount on the gas I buy from their gas stations, up to a dollar off a gallon.
They also have specially tagged items for sale where you can only get the discount if you have a card. I look for those special items (if they are things I need or want) whenever I go shopping. Sometimes the sales are ridiculously cheap, like large bags of pretzels that are 10 for $10, for instance. And no, you don’t have to buy 10 of them to get the discount, either. You can buy one bag for a buck.
Presumably they claim to offer something in return for your $40 or $50 – frequent shopper points, discounts, access to special offers, something. Whether what they offer is worth $40 or $50 is another matter, of course.
Why do they do it? Partly because they think it builds loyalty – you are more likely to shop there consistently if you have that connection with them. But mainly because it gives them a lot of useful marketing information about you. They can tell a great deal about you from what you buy – information which they can (a) use, and (b) sell. Girlfriend move in lately? They know about that. Girlfriend move out? Sorry to hear it. They know about that too. Had a baby lately? If you have suddenly taken to buying disposable nappies, they have a lot of other things you might be interested in. You’ll hear about it. Not just baby stuff – you’re a likely target for home movie rentals, for instance. You might be hearing from other suppliers too – at a time like this, you should be considering whether you have enough life insurance, so the retailer is really doing you a favour by giving – OK, selling – your name to some insurers. And so it goes.
You’re basically motivating the customer to shop at your store, instead of the competition. It’s not really a tracking issue, as it’s not that hard to keep track of what you use your credit/debit card on… and people who pay cash, well, they’re usually not all that important.
I’ve got a store card, that’s also a Visa (due to banking being a part of the business). Every month they deposit a percentage of what I’ve spent there to my account, the more I spend, the higher the percentage. Spending includes groceries, insurance payments, electricity, water, phonebills, broadband, gas… hell, I even get an extra bonus if I use the card as a visa card. Basically, it’s like getting a permanent 5% off on everything I buy… as long as I buy it from them, or someone affiliated with them. Other stores would have to be more than 5% cheaper to make it profitable to me… falling under my normal spending would also drop my total percentage. And on top of that are the “for card holders only” specials.
Admittedly, joining did cost a bit, but it did get me invited to shareholder meetings to ask annoying questions… which is totally worth it on its own. Seeing as they are pretty dominant in the area… I’d be buying most things from them anyways, makes sense to have a card.
Warehouse Clubs – Costco, Sam’s, BJ’s. These charge a yearly fee for the privilege of shopping there. The prices for their items are generally lower than supermarkets and over the course of the year, most people save enough to pay for the card (in theory). They make money because they have small staffs, don’t have a fancy store, and don’t spend a lot of time stocking.
Supermarket Cards – these are from regular supermarkets (and now some drug stores) and are free. They provide discounts on particular items – an item may only be on sale for those who own cards (sometimes, they will also give the discount if you don’t have a card, though that’s dependent on the clerk or store manager). There may be other promotions, like a discount on gas (which people love, but which don’t save anyone all that much – for me, it’s about 70 cents for every $50 I buy).
The latter cards use purchase information to create sales for those who are on the list, and also use the information to look for items to stock. But with modern cash registers, they can probably get that information, anyway; they just can’t tie it into a particular customer.
From what I see, it slows the line down only by the couple of seconds it takes to pass it by the register, so I don’t see what the complaint is.
The big plus for me is the much cheaper sale prices that I get with the card. The store gives these extra discounts for two reasons: One, as others have mentioned, is to reward customer loyalty – they don’t want me going to the guy across the street next week. But INfrequent customers who happen to be in the store, there is no incentive to give then good prices.
But the second reason, as UDS wrote, is data collection. Knowledge of my shopping habits is very valuable to the store, and they will pay me to give them that info. They collect this info via my Member Number, and after a while, it is a simple matter to learn that I frequently buy A, B, and C, and I never buy D, E, or F. This helps them in ways I can’t begin to imagine, but my first guess is that it will teach them to stock the things I like. Nor do I understand why Captain Midnight doesn’t want them to know these things.
I eat that much in free samples a year. Also, I get a check back from them every year; either for not spending enough and getting a membership fee refund or for spending a lot and getting cash back credit. Nothing asinine about it.
Maybe it was only the first year I got this and it wasn’t the full amount, just a percentage of the membership. Once they hooked me I always spent enough to get cash back rewards. That and I still eat like a pig for free when I go there.
Do they link store discount cards with the credit cards used on them? I use addresses from TV shows, and the local weather line as my phone number, but I use my credit card to pay, so does that ruin my anonymity?
I believe it’s if you have an executive membership, which is $100 a year instead of $50 a year. Basically, at the end of the year you’ll get a check for 2% (I believe that’s the percentage) of the total purchases you made that year. If you didn’t buy enough to get at least the $50 extra the executive membership cost, they’ll give you $50 anyway so you didn’t actually spend extra for it.
I also like my supermarket loyalty cards as I frequently receive packs of coupons from Kroger that are geared toward things I buy, Normally, I do not use coupons as I do not want to go through a pile of them to find the few that might interest me, but I will use these ones.
Consider someone like my mother, who has about eight different grocery stores she shops at regularly. She goes through all of the ads in the paper to find the really good sales, and then she’ll go to a store and only buy the things they have really good sales on. All the stores lose money on her (they only offer sales that good in the first place in the hopes that once you’re in the door, you’ll buy a bunch of other stuff too), so they want to discourage that kind of behavior. Loyalty cards are one way to do that: If you’ve gone to the trouble and possibly money to get a card from the store, then you’ll be more inclined to do all of your grocery shopping (not just the cheap stuff) there.
I just want to note that the demographic information collected by supermarkets can be useful internally - they don’t all sell it, and they’d find it useful even if they didn’t.
The internal uses stem from the ability to track behavior. If moving product A down a shelf increases sales, they want to know that. If the big promotion on cheap hot dogs paid off via increased sales of buns and ketchup, they want to know that too. If a certain category of customer only comes in when there’s a loss-leader involved, they’ll have a better sense of what to offer and how often. If a coupon for product X gets you to buy just once, that’s not as valuable to them as if you use the coupon once and then continue buying the product at full price later.
One thing that I’m sure Costco has learned from me: I’m likely to buy brand-name items only when they send out a coupon that makes it as cheap as the “generic” Kirkland Signatures brand. They can use that data to encourage advertisers to buy advertising space in their coupon booklets.
I’m not sure why you are opposed to the membership cards; just don’t shop there.
I think the biggest benefit is that it keeps bums out of the store, although you would not know that from the long queue jostling aggressively for a free sample of chips and hummus at my local Costco…
As nearly as my wife and I can tell, they are scarey good at tracking us. Somehow Costco knows what we are gonna want before we go to the store, whether it’s a generator or a flashlight or salsa. Or maybe we just aren’t as unique as we like to think we are.
We like Kirkland stuff, too, better than many brand names.
HEY, you talkin to me? Well step aside and quit standing between me and the corn dog samples thank you. And I’m taking three because my kids are in the next aisle if you must know man, really . . .
