Grocery Club Cards
Originally posted on WIBC.com on 08/26/2009:
In researching today’s topic, I found the below article on CBS News’ website. It will make you think twice about the supermarket “loyalty” cards:
Grocery Club Cards: Real Savings?
By Melissa Cheung (CBS)
When John Vanderlippe heads out for groceries, it’s a 50-mile trip. Each way.
When people hear that he drives 100 miles round trip to go grocery shopping, “they think I’m nuts” and “crazy,” Vanderlippe told CBS News Correspondent Jim Axelrod.
Wrong. Unless you consider cutting a third off your grocery bills crazy. He does his shopping at a store without one of those club cards that are supposed to save you money.
Opposed to a card store, “you can save the most on pretty much everything,” says Vanderlippe.
Vanderlippe says those little cards that promise special savings for special customers are nothing more than an industry scam.
“I find it offensive that they make it appear you’re saving money when in fact, you’re not,” he says.
He claims that card stores cut prices for their card-holders on items already jacked up to make it look like a better deal.
“At the card stores, they’re selling this for $2.99,” says Vanderlippe, showing Axelrod dishwashing soap. “They put it on sale with the card for $1.99. But if you look here, we can buy it for $1.99 every day.”
Brian Woolf’s company sets up those card programs.
He believes that the cards provide information that identifies the best shoppers to target them for bigger discounts down the line.
The primary reason these programs exist is for the supermarkets to get data on what their shoppers are buying.
“That’s step one,” says Woolf. “Step two, they get the data so they can look after the customer better.”
Of course, as far as consumers are concerned, there’s really only one very simple question that counts: do you save any money with one of these cards or not?
To conduct our own, admittedly unscientific survey, Axelrod went shopping with a list of a dozen or so items we had prepared before we knew what was on sale.
First at a card store, but without using a card, he was charged $45.95.
Then with a card, he was charged $40.69, saving five dollars and change.
But check out what happened when he drove across town to buy the same items at a non-card store.
“Ok, your total’s $39.58,” says the cashier.
But loyalty-card advocates say savings can’t be measured by one trip to the store because the regular customers receive specially targeted offers.
It’s not necessarily a case of prices on the shelf. Woolfe says, “that’s just the entrée.”
Which is exactly what bothers John Vanderlippe.
“In a way, it’s discrimination,” Vanderlippe says. “It’s pricing discrimination.”
Not so says Woolf — just good business.
“The top 30 percent give you 70 percent of your sales,” Woolf says. “And so you’re really catering for those who provide the bulk of your sales.”
But now, with more than 12,000 supermarkets now offering card programs, John Vanderlippe may be doing a lot more driving to avoid them.