Grocery "Savings" Cards - what they're costing you.

bokbadok · Senior Bucketkeeper

Grocery "Savings" Cards - what they're costing you.

Duke of Mirth · Profuse Pontificator

Most of the chains around us dumped these a couple years back. But even back in business school in the late 90s I was aware of what they were being used for. You didn't think they were giving those things out from the goodness of their heart do you?

LoudmouthMormon · Profuse Pontificator

I've never been undert the impression that these numbes saved me much money - it just seemed like a necessary complication to being able to pay a fair price.

I have a wallet full of these cards. The info is 8-ish years, 2 kids, and 2-3 moves outdated, but they're welcome to it if they still want it. I do most of my shopping at Walmart, but occasionally find myself in one of these places with an urgent purchase to make, and often am able to avail myself of the 'preferred price'.

LM

Mahonri · Senior Bucketkeeper

In Arizona at least, if you forget your little discount card, you can give the person checking you out your phone number and that will give you the discount. I don't carry the cards anymore.

bokbadok · Senior Bucketkeeper

The few times I shop at Albertson's, I "forget" my card, and when my phone number doesn't show up in the system, the checker uses his checkstand card to give me the discount. Don't know how long that will keep working.

bokbadok · Senior Bucketkeeper

But what about Costco or Sam's Club? Anybody shop there?

arbilad · Head Chef

Funny, the company that owns the Albertsons in Colorado has done away with loyalty cards. So imagine my surprise when I walked into a Utah Albertsons and they asked for my card.
We go to Sams Club for bulk items like flour. They also have the cheapest milk around. If you know what to buy there and what not to, you can save money.

LoudmouthMormon · Profuse Pontificator

Oh yeah - Sam's club milk. I think we save enough just on milk to pay for the yearly membership. Like Arbi said, you gotta know what to buy there and what not to, because some things are bargains, some things are more expensive.

Jen · Senior Bucketkeeper

That's how we do it. We buy meat at Costco because it's a few more cents a pound, but much better quality, and chicken for instance we get more meat per chicken breast because it's not full of gristle. I also have a list of prices and continuously check prices of my regular grocery store and Costco, and buy accordingly.

arbilad · Head Chef

Watching for specials can help, too. For instance, when the local supermarket has 10 packets of breakfast sausage for $10, I'll pick some up. But usually I don't.

Pt314 · Senior Member

arbilad wrote:

Funny, the company that owns the Albertsons in Colorado has done away with loyalty cards. So imagine my surprise when I walked into a Utah Albertsons and they asked for my card.
We go to Sams Club for bulk items like flour. They also have the cheapest milk around. If you know what to buy there and what not to, you can save money.

What is even more funny, is that is wasn't that long ago that the Albersons here in Utah did not only not require cards, but they advertised that it was that way. Then just a couple years ago they started the card thing.

bokbadok · Senior Bucketkeeper

The thing about Sam's Club and Costco - again - is the membership card. Everything you purchase there can be tracked. Does that bother anyone?

arbilad · Head Chef

Pt314 wrote:

arbilad wrote:

Funny, the company that owns the Albertsons in Colorado has done away with loyalty cards. So imagine my surprise when I walked into a Utah Albertsons and they asked for my card.
We go to Sams Club for bulk items like flour. They also have the cheapest milk around. If you know what to buy there and what not to, you can save money.

What is even more funny, is that is wasn't that long ago that the Albersons here in Utah did not only not require cards, but they advertised that it was that way. Then just a couple years ago they started the card thing.

Actually it was that way in Colorado too - they advertised that they were cardless, then they went with cards. Then when the parent company divested itself of the Albertsons chain in Colorado, the new company that picked it up did away with cards again. A cashier told me that they were very happy about that - they didn't like the cards.

Duke of Mirth · Profuse Pontificator

Yea, I'm worried that they might come to my house and force me to buy more canned goods for my food storage!

dianoia · Senior Member

Personally, I'm not bothered by the cards at places like Costco, and I'll use a card at the rare time I shop at Safeways (the store is ridiculously expensive up here).

But I do know a sister with almost two years worth of food storage who insists on paying cash for anything food-storage related. She doesn't want those purchases to be tracked.

Jen · Senior Bucketkeeper

Doesn't bug me. So Costco knows that once a month or so I go buy ground beef, chicken, baby wipes, and maybe some ciabatta rolls. Why should that bother me?

dianoia · Senior Member

(Crossing my fingers because it's rumored we'll either get a Costco or a Superstore in my town....oh please oh please oh please.)

LoudmouthMormon · Profuse Pontificator

bokbadok wrote:

Everything you purchase there can be tracked. Does that bother anyone?

I'm trying to think of some possible abuse of this information that I would care about. But I can't come up with anything more realistic than unwanted junk mail.

I mean, what possible use to Da Man {tm}, is a list of people who buy bananas and milk at Sam's Club?

LM

Duke of Mirth · Profuse Pontificator

Well maybe they'll have the cops following you around if you're the guy buying Jack Daniels from Costco in the 55 gallon drums.

Poncho29 · Senior Bucketkeeper

You don't need a membership card to Costco or Sam's Club if you are just going in to fill a prescription. We price-match with other pharmacies all the time for people in my pharmacy.

But, it's a pain to try and get Costco's prices because they have caller ID and when they see that it's another pharmacy calling they won't give it to us. Even though they are required by law to do so.
Usually they tell us that the patient has to come in and get the price. Or sometimes we use our cell phones to call them if one of us happens to have one with us.
So we usually tell people to go on-line and get their prices, because we need a print-out or an old label in order to do the price-match.

Janey · Senior Member

It bothered me that Costco tracked all my purchases. But Costco bothers me anyway, so I was just looking for an excuse not to go. It's too big, and there are only three people in this house. I don't need to buy ketchup by the gallon. I buy gas there, since DaKnife signed us up for a membership. I don't plan to renew the membership.

It doesn't bother me that Smith's tracks all my purchases. But I like Smith's. So there's my illogical botheration - if I like the store, they can keep track of what I buy. I've never noticed them doing anything with the info other than mailing me coupons.

Jen · Senior Bucketkeeper

Today I bought apples, too. That oughta throw them.

bokbadok · Senior Bucketkeeper

I'm trying to think of some possible abuse of this information that I would care about. But I can't come up with anything more realistic than unwanted junk mail.

I mean, what possible use to Da Man {tm}, is a list of people who buy bananas and milk at Sam's Club?
I don't know about Sam's Club, but the article linked above discusses information used in segmentation of the customer base. The quotes below highlight the stuff that bothered me:

Card programs allow stores to identify who their "best" customers are and then cater the store to meet their needs. A study conducted in the late 90's showed that 75% of a supermarkets profit came from just 30% of their customers. When store spokespeople say they exist simply to "Reward the best shoppers. We will target them in the future. They will get the benefits", as QFC recently stated in Seattle, it certainly sounds like they are referring to everyone that participates, but the real goal is to identify and reward that elite 30%
One of the first ways this strategy is being implemented is in product selection. If a store's high profit customers rarely buy an item, no matter how well it sells to everyone else, it may be dropped to accommodate those items higher on the profitable customers' wish list.

It has also been suggested that stores should "withdraw low margin offers to unprofitable customers and offer the best customers aggressive pricing and special benefits" and that "some [customers] might even have to be discarded if the company is to concentrate its resources on retaining profitable customers."

The "two tier" pricing that we now see in stores (card price, non card price), will soon develop into a three-tiered system. Stores are being advised to "make one offer to a frequent, high spending customer, a completely different offer to a low spending customer, and yet a third offer to a new customer with moderate spending habits."
You know how some stores (Albertson's comes to mind) have those little printers at the register that give out coupons when you get your receipt? It never occurred to me that different people would get different offers. Huh.

In a paper aptly titled "It's really about economics, not loyalty," the differential pricing issue is explained to grocers as follows:

"Do you pay everyone the same wages? The inescapable conclusion is that charging the same price to each customer is as illogical as paying everyone, from chairman to carhop, the same hourly wage! Our salary policies are based upon the concept that our wage and benefits package should vary in proportion to each employees economic contribution to the firm. The same logic should also apply to our customer price and benefits package." [13] (Emphasis added.)

Yes, let's charge higher prices to people who can least afford to pay them. Nice.

hiccups · Future Queen in Zion

Yes, that is bothersome. I cope in two ways. I mostly shop at places that don't use cards and when I do make a quick trip to the card place (because it's soo darned close by) I use the self-checkers and swipe any interesting coupons left by the previous shoppers.

I'm most likely a very profitable customer for Walmart and WinCo, but I'm sure Albertson's thinks otherwise.

Janey · Senior Member

One of the first ways this strategy is being implemented is in product selection. If a store's high profit customers rarely buy an item, no matter how well it sells to everyone else, it may be dropped to accommodate those items higher on the profitable customers' wish list."
Oh, I didn't think of that, bok. That is a problem. I'm assuming that foods with the highest profit margins are typically the processed, sweetened, ready-to-eat foods or mixes. I'm a low-profit shopper who buys raw ingredients. If the stores eliminate low-profit healthy stuff in favor of high-profit unhealthy stuff, that isn't going to be good for me personally, or for America's health as a whole. You eat what's available.

I've noticed I swipe that loyalty card a lot, but I don't often buy stuff that is on sale unless it's milk or produce, and sometimes meat. Lots of package mixes and treats go on sale, and I don't buy those very often.

Duke of Mirth · Profuse Pontificator

bokbadok wrote:

The "two tier" pricing that we now see in stores (card price, non card price), will soon develop into a three-tiered system. Stores are being advised to "make one offer to a frequent, high spending customer, a completely different offer to a low spending customer, and yet a third offer to a new customer with moderate spending habits."
You know how some stores (Albertson's comes to mind) have those little printers at the register that give out coupons when you get your receipt? It never occurred to me that different people would get different offers. Huh.

Sorry to break this to you but different people were already getting different offers based on their purchase decisions. I remember back in the early 90s studying Catalina Marketing back in school. http://www.catalinamarketing.com/ So this has been around for a while.

Many business already offer preferred benefits for their top customers. Car companies, airlines, autoparts stores, sporting goods retailers, casinos, and grocery stores have already been doing it. My Costco Business card gives me perks that the regular card doesn't get. I get extra benefits based on my buying from the office supply place that most people don't get. I'm sure there are some people that even get more benefits. It's the nature of business to give your top customers more than the other folks.

bokbadok · Senior Bucketkeeper

Thanks for sharing that, Jason.

So it isn't new to business school grads. I thought it would be an interesting topic to discuss.

So do you see it as a negative or positive thing that marketers track your purchases and then use targeted advertising?

It occured to me that google does this constantly.

Cocobeem · Keeper of the Holy Grail

Not only is it positive, but when those 10 page surveys come in the mail, I get all warm fuzzified and think, "They want to know all about ME."

hiccups · Future Queen in Zion

Just don't answer any questions about the exact location of all that wheat you've been buying.

bokbadok · Senior Bucketkeeper

All the more reason to get your food from dumpsters!

hiccups · Future Queen in Zion

I think I just threw up in my mouth a little bit.

glumirk · Senior Member

Back when Fry's had my real address, they always sent me coupons so I could get my allergy medicine $5 off, a good deal on my feminine supplies, and Dreyer's ice cream for the price of the cheap stuff. And that was just buying stuff for me in my college days. I didn't mind so much that they tracked my shopping because they gave me coupons I would use! Like sales on yogurts and cheeses, which they knew I bought only when on sale. Those coupon books would save me at least $10 off of stuff that I was already buying (back then ice cream was a necessity). I don't see anything wrong with that!

Duke of Mirth · Profuse Pontificator

I really don't see it as a good or bad thing. I think we do tend to spend more when a company delivers a percieved value that isn't offered by someone else. If this sort of target marketing adds that value and that is something we want then it is a good thing.

LoudmouthMormon · Profuse Pontificator

Ignorant people pay more. Poor people pay more, sometimes because it's geared that way, sometimes because poor people tend to also be ignorant. These things have been true for longer than I've been paying attention. IMO, the solution is not to complain or fret when some technological advance makes it easier for a store to find out if you're ignorant or poor. IMO, the solution is to make sure you and those within your stewardship are neither ignorant nor poor.

Seems to me, following the church's strong and oft-repeated counsel to get tons of education is a prime tier-one way to accomplish those goals. I still gnash my teeth when I get caught by a "stupid tax", but it seems to happen less and less as years go by.

LM

hiccups · Future Queen in Zion

That reminds me of how a friend of mine used to say that the lottery was a tax on people who can't do math.

LoudmouthMormon · Profuse Pontificator

Baaaaahghh! Speaking of 'stupid tax' - here's one I almost just got bit by:

Sharper Image gift cards now worthless

hiccups · Future Queen in Zion

Wow... I usually spend cards as soon as I get them... now maybe I'll only give them in special circumstances. That's just bunk.

Janey · Senior Member

If you're interested in how targeted marketing works, the book Super-Crunchers, by Ian Ayres, had a couple chapters explaining the randomization studies that advertisers use to decide what to offer you, and how to spot whether or not you're a profitable customer. http://search.barnesandnoble.com/Super-Crunchers/Ian-Ayres/e/9780553805406/?itm=1

Cocobeem · Keeper of the Holy Grail

Sharper Image...

MrCoco found one of those ion gives you different Oxygen Ozone whatever thingeys at the DI for $5 and we returned it to Sharper Image and got like $200 in store credit!

Now that there ain't ignernt.

bokbadok · Senior Bucketkeeper

Good move! I hope you spent it on something before now...

Cocobeem · Keeper of the Holy Grail

He probably re-invested at the DI. What do ya do...?