By Mike Thayer
They’re called loyalty cards for a reason. With a goal of customer retention in mind, companies like Kroger, a.k.a., Dillon’s in my neck of the woods, retain customers by ‘rewarding’ them for their repeat business and purchase behavior.
It’s a form of advertising, a marketing tool, so are digital coupons. Both tools motivate you to buy again from Dillon’s, Ace Hardware, Walgreen’s or wherever your preferred loyalty card takes you. Just keep the following in mind: The company goal is to get you to spend more money.
Loyalty programs and coupons are great, they really can save you some valuable dollars, but only if you as a shopper stick to your shopping list and stay within budget. Those “Buy four and save $1” digital kind of deals for example… If that item isn’t something you normally buy or budget for, you’re not saving a few bucks. The store has convinced you to spend more of your money with them. It doesn’t matter if you saved $1 or $5 on a particular item or two if you ended up spending $10, $20 or more overall on that cart or basket full of items.
According to Annex Cloud, a company that specializes in loyalty programs, loyalty card holders spend 5-20% more than non-members on average. This makes companies like Kroger happy, because that extra spending brings in more revenue.
Stores like Kroger know that the more they discount select items, the more likely you’ll spend money with them. It’s a lure to get you into the store. Stores using loyalty cards are banking on you to take advantage of a discount/sale AND blowing your budget. Stores will discount certain items, going so far as to lose money on that item, because customer behavior tells them you’ll end up emptying your wallet more than you planned on, buying other items.
Think about it: You’re shopping and see a digital coupon deal to save $1 when you purchase 4 Knorr Pasta or Rice sides, you grab them, impulse buy. What a deal, right? You’re saving $1… Or are you? The regular price for those sides is $1.33 each so the total price for four would be $5.32 + tax. Discount the $1 and your cost is $4.32 + tax (in Kansas anyway). But is that an item you normally buy? If not, you just spent an extra $4.32, unless you took an item, perhaps two off your shopping list to stay within budget. If it is an item you normally buy, then great. But let me guess, when visioning a meal that includes one of those Knorr sides, you bought a loaf of garlic bread (also not on the shopping list) for $2.50 to go with it. Don’t get me wrong, putting a good meal plan together is a good thing, but at the store?.. You’ve now spent an extra $6.82 + tax for items not on your shopping list. You’re doing exactly what the store is hoping you’ll do.
And never mind the regular, everyday price for that Knorr side is about $1.26 at a competing grocer like Walmart that doesn’t mess with loyalty/coupon programs. No, it doesn’t beat that digital price for this week, but it will next week, and the week after that and so on… Again, if it’s something you don’t normally buy, are you really saving? And if it is something you buy regularly, are you buying it at the right store? Then there’s the discount brand for essentially the same thing at Aldi for around $0.99.
Remember, loyal cards and coupons (digital or paper) are only beneficial to you if it’s something you normally buy and budget for. Saving money is a very good thing and sure, you can do it with coupons etc., but that only works if it fits within your spending limits and routine. But you don’t actually need a loyalty card or use coupons to save. You’ll spend less week-in-week-out shopping at Aldi or Walmart vs. buying your groceries using a loyalty card at a mainstream grocery like Kroger. Just stick to your budget, stick to the shopping list, stick to the store with the best prices for the products you prefer!
Related: Mainstream Grocery vs. Discount Grocery: Dillon’s (Kroger) vs. Aldi
$pend Wisely My Friends…
Related: Grocery Stores in Wichita
Enjoy this post?
If you appreciate this post and want to support more great content on BachelorontheCheap.com, you can help keep this site going with a one-time or a monthly donation. Thank you so much for your support! ~ Mike
Grocery store loyalty cards and digital coupons are designed to make you spend more money – Bachelor on the Cheap
By Mike Thayer
They’re called loyalty cards for a reason. With a goal of customer retention in mind, companies like Kroger, a.k.a., Dillon’s in my neck of the woods, retain customers by ‘rewarding’ them for their repeat business and purchase behavior.
It’s a form of advertising, a marketing tool, so are digital coupons. Both tools motivate you to buy again from Dillon’s, Ace Hardware, Walgreen’s or wherever your preferred loyalty card takes you. Just keep the following in mind: The company goal is to get you to spend more money.
Loyalty programs and coupons are great, they really can save you some valuable dollars, but only if you as a shopper stick to your shopping list and stay within budget. Those “Buy four and save $1” digital kind of deals for example… If that item isn’t something you normally buy or budget for, you’re not saving a few bucks. The store has convinced you to spend more of your money with them. It doesn’t matter if you saved $1 or $5 on a particular item or two if you ended up spending $10, $20 or more overall on that cart or basket full of items.
According to Annex Cloud, a company that specializes in loyalty programs, loyalty card holders spend 5-20% more than non-members on average. This makes companies like Kroger happy, because that extra spending brings in more revenue.
Stores like Kroger know that the more they discount select items, the more likely you’ll spend money with them. It’s a lure to get you into the store. Stores using loyalty cards are banking on you to take advantage of a discount/sale AND blowing your budget. Stores will discount certain items, going so far as to lose money on that item, because customer behavior tells them you’ll end up emptying your wallet more than you planned on, buying other items.
Think about it: You’re shopping and see a digital coupon deal to save $1 when you purchase 4 Knorr Pasta or Rice sides, you grab them, impulse buy. What a deal, right? You’re saving $1… Or are you? The regular price for those sides is $1.33 each so the total price for four would be $5.32 + tax. Discount the $1 and your cost is $4.32 + tax (in Kansas anyway). But is that an item you normally buy? If not, you just spent an extra $4.32, unless you took an item, perhaps two off your shopping list to stay within budget. If it is an item you normally buy, then great. But let me guess, when visioning a meal that includes one of those Knorr sides, you bought a loaf of garlic bread (also not on the shopping list) for $2.50 to go with it. Don’t get me wrong, putting a good meal plan together is a good thing, but at the store?.. You’ve now spent an extra $6.82 + tax for items not on your shopping list. You’re doing exactly what the store is hoping you’ll do.
And never mind the regular, everyday price for that Knorr side is about $1.26 at a competing grocer like Walmart that doesn’t mess with loyalty/coupon programs. No, it doesn’t beat that digital price for this week, but it will next week, and the week after that and so on… Again, if it’s something you don’t normally buy, are you really saving? And if it is something you buy regularly, are you buying it at the right store? Then there’s the discount brand for essentially the same thing at Aldi for around $0.99.
Remember, loyal cards and coupons (digital or paper) are only beneficial to you if it’s something you normally buy and budget for. Saving money is a very good thing and sure, you can do it with coupons etc., but that only works if it fits within your spending limits and routine. But you don’t actually need a loyalty card or use coupons to save. You’ll spend less week-in-week-out shopping at Aldi or Walmart vs. buying your groceries using a loyalty card at a mainstream grocery like Kroger. Just stick to your budget, stick to the shopping list, stick to the store with the best prices for the products you prefer!
Related: Mainstream Grocery vs. Discount Grocery: Dillon’s (Kroger) vs. Aldi
$pend Wisely My Friends…
Related: Grocery Stores in Wichita
Enjoy this post?
If you appreciate this post and want to support more great content on BachelorontheCheap.com, you can help keep this site going with a one-time or a monthly donation. Thank you so much for your support! ~ Mike