Customer loyalty cards with dubious discounts to avoid, according to Which? [Video] #UKFinance

Loyalty cards might not offer such a good deal amid “murky and confusing” pricing, according to an investigation by consumer body Which? which revealed dubious discounts across health and beauty retailers and supermarkets.

Which? researchers looked at how many times the non-member prices on items with loyalty discounts had been in place during the previous six months.

At Superdrug, one in six (16%) of the products had been at their non-member price for less than half the time. At Boots it was one in 10 (10%). For supermarkets, it was 10% at Tesco, 5% at Sainsbury’s and 3% at Co-op.

The consumer body found cases where prices were raised to a higher price for a relatively brief period before going on “offer”. An example found at Superdrug was an Ultimate Day & Night Duo — Olay Regenerist & Retinol Bundle. This product was £71.98 for non-members, while for members it was £59.99. However, this product was only priced at £71.98 for 13 days. Prior to that it was £35.98 for everyone.

At Boots, an Oral-B iO7 electric toothbrush (blue) was at a non-member price of £400, while the members price was £150. This product was only priced at £400 for 13 days before the offer, prior to that it was £150 for everyone.

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At Morrisons, Lindt Lindor Cornet Blood Orange Truffles (200g) were at a non-member price of £6.30 but had a member price of £4.50. Which? found that the £6.30 price was only in place for just over a month before the loyalty promotion started. Before that, the chocolates were £5 for everyone. This product was on another promotional discount that did not require a loyalty card.

At Sainsbury’s (SBRY.L), Ariel All-in-1 Pods Washing Liquid Capsules 39 Washes were £10.50 for non-members but £9.50 for members. They had only been £10.50 for 28 days. Before that they were £10 for everyone and just over two months earlier they had been £9.50 for everyone.

At Tesco (TSCO.L), Ambre Solaire Ultra-hydrating Sun Cream Spray SPF30 200ml was £8 for non-members and £6 for members. But it had only been £8 for 14 days. Before that it was £6 for everyone.

Shoppers are also growing increasingly suspicious of the loyalty prices, with over half (55%) of those surveyed by Which? thinking the non-member prices were higher than the usual selling prices of those products at the same retailer.

Some shoppers said they believed that shops are hiking the non-member prices for some products to make the discounts seem better than they are.

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Looking at loyalty promotions on branded goods where the non-member price had been in place for less than half the time over the previous six months, Sainsbury’s prices were 13% higher than Waitrose’s, while Tesco’s prices were 10% higher than Waitrose’s.

Ele Clark, Which? retail editor, said: “Loyalty cards are increasingly big business, with the explosion in two-tier pricing meaning shoppers will often pay a lot more if they aren’t a member of the retailer’s scheme. But while the discounts can look impressive, many shoppers are growing suspicious of non-member prices that seem high.

“We looked at the pricing history of thousands of products and found that, while the majority of discounts were not misleading, there were some questionable non-member prices and some examples that looked like an outright rip-off.

“Meanwhile some products were always, or almost always, on loyalty promotion, making it difficult to spot a genuine deal.”

Which? found 649 products at Boots where the price for non-members was raised on the same day the loyalty promotion began. It said some of these might have been on a different kind of promotion immediately before the loyalty price launched, “but the change raises questions” about the tactics at play and whether the “non-member prices used to highlight the supposed savings are genuine.”

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The research found Superdrug’s loyalty prices offered an average 33% off the higher non-member price.

The three biggest supermarkets in the investigation all offered similar savings — 25% at Morrisons, 24% at Sainsbury’s and 23% at Tesco. Co-op and Boots both offered 10%.

Which? is calling for guidance on how consumer law applies to pricing promotions to be updated to clarify how it applies to loyalty pricing, which is being adopted and rolled out across thousands of products by retailers.

The Competition and Markets Authority (CMA) launched a review in January to consider the impact on shoppers of the schemes used by supermarkets that offer cheaper prices only to loyalty card members.

The watchdog has said that its ongoing review of supermarket loyalty prices is unlikely to identify widespread evidence of promotions that mislead shoppers.

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