I've suspected loyalty points programs are just an accounting trick. You're creating your own currency which doesn't always get used up, and you can devalue whenever you need to make your quarterly numbers.
And if your program really catches on, you can get other retailers to sign on, creating a side business, or spin it off as a separate business if someone is willing to pay you for it (it's easy to segment off from your core business).
In general, store points and so forth are something that stores hope you'll perceive as being of greater value (and hence encourage loyalty) than they'll every have to actually deliver on.
The norm with grocery stores though seems to be more in the vein of giving instant savings to card holders. Some chains (Safeway out West is one of them I think) have so many and such deep special prices that I have a card even though I only shop there on vacation sometimes.
(Interestingly, Shaws--which is an Eastern US chain now owned by European company I believe--discontinued their card in this vein a few years back.)
Comments
I've suspected loyalty points programs are just an accounting trick. You're creating your own currency which doesn't always get used up, and you can devalue whenever you need to make your quarterly numbers.
And if your program really catches on, you can get other retailers to sign on, creating a side business, or spin it off as a separate business if someone is willing to pay you for it (it's easy to segment off from your core business).
In general, store points and so forth are something that stores hope you'll perceive as being of greater value (and hence encourage loyalty) than they'll every have to actually deliver on.
The norm with grocery stores though seems to be more in the vein of giving instant savings to card holders. Some chains (Safeway out West is one of them I think) have so many and such deep special prices that I have a card even though I only shop there on vacation sometimes.
(Interestingly, Shaws--which is an Eastern US chain now owned by European company I believe--discontinued their card in this vein a few years back.)