Points to ponder before getting a supermarket card
More than 2.6 million New Zealanders belong to our local supermarkets’ loyalty schemes.
But is consumers’ loyalty doing anything beneficial for them or their wallets?
What loyalty schemes are there?
Both New World and Countdown offer loyalty cards for customers.
Around two million of us carry Countdown’s Onecard, and around 1.6m have New World’s Clubcard.
The New World Clubcard allows members to get ‘‘club’’ discounts, automatic entry into Clubcard competitions, and also offers the option to earn one Flybuys dollar or $0.185 Airpoints Dollars for every $25 spent. A pack of six pens was available for 99 points on the Flybuys store this week.
At Countdown, Onecard users collect one point for every $1 spent. Once you have reached 2000 points (so have spent $2000), you receive a $15 voucher, which members can save for up to 12 months or donate to charity.
It also gives members discounted prices on products. Shoppers can choose to collect Smartfuel rewards instead.
Are there risks with loyalty schemes?
Consumer NZ’s Gemma Rasmussen said that when it came to loyalty schemes, shoppers were sacrificing their personal data.
‘‘This is often held by the organisation you’ve signed up with, but it can also be on-sold to third parties.’’
If your scheme is via an app, that can mean a more intense level of collection, such as your location and your user activity, she said.
Consumer NZ did a review of loyalty schemes in New Zealand to see how lengthy their terms and conditions and privacy policies were.
Air New Zealand came out at the top of list, taking nearly 21⁄2 hours to read. As far as supermarkets went, Countdown had the longest reading time, followed by Pak’nSave, and then New World.
‘‘Even if you don’t mind your data being dished out to advertisers or sold to the highest bidder, data sharing increases the chances your information will fall into the wrong hands,’’ Rasmussen said.
‘‘A major risk is data reidentification, which is where a third party crunches the numbers on ‘anonymous’ information and matches different datasets to identify you.’’
This could open the door for hackers to access your private information, such as email or bank details. In July 2019, the data of 112,000 Air New Zealand Airpoints customers was hacked, and information ranging from contact details to passport details was exposed.
Are loyalty schemes worth it?
The Commerce Commission found in its draft report on the supermarket sector that loyalty schemes might reduce price transparency, and make it more difficult for consumers to make informed purchasing decisions.
It also said that even people ‘‘obsessed’’ with earning rewards found the schemes confusing, and users often didn’t earn enough points to receive accumulated rewards, or never redeemed them.
When Consumer NZ asked customers about the factors consumers valued in a supermarket, loyalty programmes were bottom of the list.
Just 42% rated loyalty programmes as very important, a long way behind competitive prices (77%), product quality (75%) and product range (71%). Only 4% said the programmes determined where they did their regular grocery shopping.
It also found loyalty programmes are likely to disadvantage a significant proportion of shoppers. Thirty-one per cent said they couldn’t get an advertised special price because they didn’t have the supermarket’s loyalty card.
As with all loyalty programmes, the supermarkets’ schemes cost money to administer. These costs are ultimately passed on to all their customers, whether they belong to the schemes or not.
So maybe it’s not the worst thing at all if you forget to bring the card.
‘‘Our advice is to shop by price and buy what you need, rather than by shopping to earn more points, as often rewards can be paltry,’’ Rasmussen said.