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Customer loyalty programs may save you cash, but do you know the true cost of your membership card?
loyalty

In recent years, a trend has been booming with business all over the world. They are offering consumers the opportunity to enroll in their customer loyalty programs. These arrangements provide attractive deals and can benefit both customers and the businesses providing the program.

Once enrolled in a loyalty program, the consumer is given a card to use during each purchase to incentivize them to patronize a specific business frequently. Most loyalty cards offer short term sales on items. Others allow you to earn points until you have enough to receive a gift or some kind of discount.

Businesses often offer these programs as part of a long-term marketing strategy. They hope to encourage consumers to return frequently and they analyze data from consumer spending. Loyalty cards scanned at the time of purchase will tell the business which products are most popular with different demographics and allow them to create more accurate profiles of customers. This data is valuable to marketers and impacts what products they stock and who they will target in their advertising.

Some popular loyalty programs include:

  • CVS/Pharmacy’s ExtraCare cards
    CVS cards offer customers access to in-store sales and CVS ExtraBucks. ExtraBucks are store credit earned by purchasing specially marked items. Small amounts of ExtraBucks are accumulated overtime with all purchases and the customer is allowed to spend them every 3 months.
  • Starbucks Rewards card
    Starbucks cards are accessible as a physical card and as an app on your smartphone. You earn one “star” for every purchase made with the card and receive free drinks and refills as you accumulate stars and advance your membership.
  • Stop and Shop Membership
    Stop and Shop cards are similar to those at CVS, allowing you to access sales and receive coupons at check out and online. Stop and Shop cards also accumulate points through purchases that can save you gas money at Stop and Shop gas stations.

These cards may offer attractive deals, but they can come at a cost. Being incentivized to shop more may encourage risky consumer practices, such as buying things that you don’t want or need, just to acquire more points. These businesses are also gathering information about you as you shop, and if that rubs you the wrong way, you may want to hold off from joining a loyalty program.

If you have questions about a customer loyalty program or are interested in more consumer information, visit our website: www.mass.gov/ocabr or call our hotline: (888) 283-3757

Written By:


Paul Bologna is a student at Northeastern University and is a communications co-op at the Office of Consumer Affairs.

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