Hottest Deals

March 27

Loyalty Programs Claim to save Money but Do They Really?

Posted by on March 27, 2017 at 8:19 AM

Loyalty programs may seem like a great idea to buy into because you get rewarded for your continued business with a brand. Wrong, they only really benefit the retailer in the long run because they are not designed to reward us at all in the grand scheme of things. Their main reason for existence is to milk more money from their high-value customers.

Loyalty Programs Claim to save Money but Do They Really?

The worst part about these loyalty programs is that they actually work, with a number of loyalty program websites claiming that their members spend 40% more than standard customers. The following article will explain how they work and how you are getting ripped off if you use one of these programs.

 

Although loyalty schemes claim that their members spend up to 40% more money than regular customers, they fail to inform us of how they bombard their members with email marketing campaigns, direct mail and even text messages at times. There is very little that these programs can’t do on a technical level, your Facebook profile can be linked to location, which can be connected to your mobile device and as a result they have a network of data allowing them to track you and spam you with information about stores within the proximity.

They can even follow you via retargeting ads online, e.g. if you click on a pair of sunglasses whilst browsing a retailers website, you may notice that item following you around the Internet. Industry statistics show that almost 25% of members will buy a birthday offer from their loyalty program. In the case of knowITall, this generates an additional $20,000 per month in sales.

We are not trying to take anything away from these loyalty programs, because to many customers knowing when your favourite brand is having a sale can be really useful. Personally, I have abandoned my Hotmail account purely because it gets bombarded with too many junk messages. I know I’m not an isolated case either, because in 2016 the Australian Privacy Commissioner reported that nine out of ten Australians are registered to some type of loyalty program.

Loyalty Programs Claim to save Money but Do They Really?

In our opinion, the worst rewards schemes are those from supermarkets, Coles for example will reward you with a $10 discount voucher through FlyBuys when you spend $3,500 with them. What many people fail to take in is that our data is vastly more valuable to retailers than it is to our wallets. These cards aren’t simply permission to receive marketing material, they are gateways into our lives that report our shopping tendencies, shopping times, how much you spend and personal demographic data. The worst part is that your information is sometimes sold to third parties and it’s this sale of your data that results in hundreds of spam emails reaching your account.

This statistic caught my attention too; ‘there are more than three times as many loyalty cards as there are credit cards in Australia’, the comparison website Finder.com.au revealed. That equates to 17 million credit cards and 58 million rewards cards.

I will leave you with this thought, large data sets from multiple sources are being increasingly used by politicians and a key player in amalgamating this data is a company called Cambridge Analytica, which is part owned by US billionaire Robert Mercer, a key backer in the Trump campaign. The company boasts having a psychological profile of 220 million American voters. It’s this information that allowed Trump to pinpoint voters and prey on their deepest emotions, which we believe, enabled the President to predict and potentially control voter behaviour.

The same company also donated its services to the Brexit Leave campaign and now it is planning on lending a hand to Australian politics too. If you feel strongly about this or would like to share some information then please use the comments section below.

Loyalty Programs Claim to save Money but Do They Really?


Leave a Comment

You must be logged in to post a comment.