According to research by consumer organisation Which?, loyalty cards may not be such good deals. The research revealed dubious discounts and items that are always on offer at health and beauty shops and supermarkets.
Which? researchers looked at how often non-member prices on items with loyalty discounts had been in effect in the previous six months.
At Superdrug, one in six (16%) of products were at the non-member price less than half the time. At Boots, it was one in ten (10%). For supermarkets, it was 10% at Tesco, 5% at Sainsbury's and 3% at Co-op.
The consumer organisation found cases where prices had been increased to a higher price for a relatively short period before going on 'sale'. One example found at Superdrug was an Ultimate Day & Night Duo — Olay Regenerist & Retinol Bundle. This product cost £71.98 for non-members, while it was £59.99 for members. However, this product only cost £71.98 for 13 days. Before that it was £35.98 for everyone else.
At Boots, an Oral-B iO7 electric toothbrush (blue) cost £400 for non-members, while the price for members was £150. This product was only £400 13 days before the offer, before that it was £150 for everyone else.
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At Morrisons, Lindt Lindor Cornet Blood Orange Truffles (200g) were £6.30 for non-members, but £4.50 for members. Which? discovered that the £6.30 price was only valid for just over a month before the loyalty offer began. Before that, the chocolates were £5 for everyone else. This product had a different promotional discount that did not require a loyalty card.
At Sainsbury's (SBRY.L) Ariel All-in-1 Pods Laundry Detergent Capsules 39 Washes were £10.50 for non-members, but £9.50 for members. They were only £10.50 for 28 days. Before that they were £10 for everyone else, and just over two months earlier they were £9.50 for everyone else.
At Tesco (TSCO.L), Ambre Solaire Ultra-hydrating Sun Cream Spray SPF30 200ml cost £8 for non-members and £6 for members. But it was only £8 for 14 days. Before that it was £6 for everyone else.
Customers are also increasingly suspicious of loyalty pricing. More than half (55%) of Which? respondents believe that prices for non-members are higher than the usual retail prices of those products from the same retailer.
Some customers said they believe stores raise prices for non-members on certain products to make the discounts seem bigger than they are.
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Looking at brand loyalty promotions where the non-member price was in effect for less than half the time in the previous six months, prices at Sainsbury's were 13% higher than at Waitrose, while prices at Tesco were 10% higher than at Waitrose.
Ele Clark, Which? retail editor, said: “Loyalty cards are becoming increasingly popular, with the explosion of two-tier pricing meaning shoppers are often paying a lot more if they're not members of the retailer's scheme. But while the discounts can seem impressive, many shoppers are becoming suspicious of non-member prices that seem high.
“We looked at the price history of thousands of products and found that while most discounts were not misleading, there were some questionable prices for non-members and a few examples that looked like outright scams.
“Meanwhile, some products were always, or almost always, on sale, making it difficult to find a real deal.”
Which? found 649 products at Boots that had their non-member prices increased on the same day the loyalty promotion began. It said some of these products may have been on another type of promotion just before the loyalty price was launched, “but the change raises questions” about the tactics being used and whether the “non-member prices used to highlight the supposed savings are genuine.”
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The research found that Superdrug's loyalty prices offered an average of 33% off the higher non-member price.
The three biggest supermarkets in the study all offered similar savings — 25% at Morrisons, 24% at Sainsbury's and 23% at Tesco. The Co-op and Boots both offered 10%.
Which? is calling for an update to the guidance on the application of consumer law to price promotions, to make it clearer how the law applies to loyalty prizes, which are being adopted by retailers and applied to thousands of products.
The Competition and Markets Authority (CMA) launched an investigation in January into the impact on consumers of supermarkets' schemes to offer lower prices only to customers with loyalty cards.
The regulator has said its ongoing investigation into supermarket loyalty pricing is unlikely to lead to widespread evidence of promotions misleading consumers.
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