Loyalty card Guide, Meaning , Facts, Information and Description
In the United Kingdom a retail establishment or a retail group may issue a loyalty card to a consumer. The card becomes the visible means of implementing a type of two part tariff. Prices for goods sold become contingent on whether the customer possesses a loyalty card. Prices offered to cardholders generally equal or undercut prices offered to non-cardholders. (Critics see the lower prices as bribes to manipulate customer loyalty and purchasing decisions, or as a case of low-spenders subsidising high-spenders.) Similar cards available in the United States of America generally bear the name discount cards.
The card issuer requests or requires customers seeking the issuance of a loyalty card to provide a usually minimal amount of identifying or demographic data, such as name and address. Application forms usually entail agreements by the store concerning customer privacy, typically non-disclosure (by the store) of non-aggregate data about customers. The store - one might expect - uses aggregate data internally (and sometimes externally) as part of its market research.
Many UK retailers have adopted a loyalty card system. The trend towards adoption, however, received a settback in the UK in 2001 when the chain supermarket Safeway (UK) abandoned its ABC loyalty card, stating that it preferred the ability to offer lower prices as a customer incentive rather than a points-based cash rebate. Sainsburys, a rival supermarket, have abandoned their Reward points system in favour of a new card, the Nectar loyalty card, which they issue in conjunction with a number of partners including the petrol suppliers BP, the department store chain Debenhams, and Barclaycard.
Boots, the chain of high street chemists, has a loyalty card which stores the points on a microchip. This has considerable advantages to the retailer from the point of view of data processing, since calculation and allocation of points becomes decentralised to the point of sale (the points-accounting processes can impose extreme demands on centralised computing resources).
A similar system in Canada has the retailer providing a points card to the consumer. Each purchase at the establishment provides a point total to their account, which can later be redeemed for special rewards or store merchandise. Prominent examples include HBC Rewards from the Hudson's Bay Company, and Optimum from Shoppers Drug Mart. The Loblaws grocery chains have PC Points available to those who use the Loblaws financial services (President's Choice Financial) for in-store purchases. See also Canadian Tire Money.