News & Views - Savantor

Time to rethink rewards

Saturday, 31 August 2013

Worldpay have just published a report which shows that the most popular loyalty cards are the Tesco Clubcard (68%) followed by the Nectar card at 59% and Boots Advantage Card at 48%. Well no big surprises there but the study also shows that 8 million UK shoppers use their loyalty cards less than they did a year ago as increasing numbers lose patience with traditional schemes.  The research shows as many as 1 in 3 consumers are failing to derive any value from their loyalty cards, with 30% of UK consumers finding it difficult to remember to take their loyalty card with them when shopping.

The survey also found that 75% of shoppers would like loyalty schemes to be linked to their payment card to ensure that they are automatically rewarded for purchases, while 21% want loyalty cards to be stored on a smartphone payment app.  The importance of claiming discounts and rewards easily and automatically is highlighted by the growth in popularity of cashback cards and discount services. For example, Groupon is now used by 11% and credit card cashback schemes by more than 15%.

Further to this The 2013 Credit Card Satisfaction Study by J.D. Power showed that many customers remain confused about their credit card rewards.  Customer understanding of how to earn and redeem rewards with their credit card has dropped over the past year, with 59% of customers saying they "completely" understand how to earn rewards in 2013, compared with 66% in 2012. One-third of customers said they are unaware of the benefits associated with their card.

Customers who use their card's benefits spend significantly more per month on their card, compared with those who are aware of benefits but do not use them.  So maybe there’s a case for issuers to better explain the benefits to their customers of their rewards programmes.

One other item of interest in the Worldpay research will chime with anyone who shops at Tesco and has to wait at the till whist the terminal spews out volumes of paper showing what you spent, how much you saved, how much you can get off your next shop or off fuel or what great 2 for 1 offers are available etc etc.  The research revealed traditional paper till receipts may soon be on their way out. Younger shoppers are especially keen to see their demise, with 26% of 16-24 year-olds wanting to receive vouchers through text and 21% through a mobile app instead. However, more than half of older consumers aged 25-64 would still prefer a paper voucher issued at the till instead.  Well here’s one shopper in that age group who would rather receive a text than try to stuff receipts the size of War and Peace into my wallet.

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