Consumers are receiving ever diminishing rewards for their loyalty, despite the cost of living crisis pushing up prices across the board.
Inflation is sitting at 10.4 per cent, with interest rates now at 4.25 per cent, yet both Tesco and Boots have slashed their offers for Clubcard and Advantage Card customers, leaving loyal shoppers furious.
Tom Church, co-founder of money-saving community LatestDeals.co.uk, said: “Tesco has said it’s reducing the value of Clubcard points due to rising costs. Boots said they’re changing to focus on giving more instant rewards. But the excuses sound wafty and they haven’t replaced the lost benefits in any meaningful way.
“Shoppers should cash them in as soon as possible to avoid further reductions in their value.”
So what are the changes – and how much more will you be out of pocket? i explains.
Tesco Clubcard is a reward scheme that gives cardholders one Clubcard point for every £1 you spend at Tesco. You can’t spend the points until they have been converted into vouchers and to do this you need a minimum of 150 Clubcard points (the equivalent of £1.50).
If you swap them with a Reward Partner, of which there are many including restaurants and hotels, you need to do this via the Clubcard website. These boosts will often be have minimum levels and you can only swap increments of that amount, for example, if you have 120 points you can only use 100 points.
However, one of the main reasons people like Clubcard is for the discounts they get on different products in store and online that change each week.
But from 14 June, anyone who swaps their Clubcard voucher for a partner redemption (such as Pizza Express vouchers, Hotels.com vouchers etc), they will only receive twice the face value rather than the three times face value that is available now.
This was down from four times the face value in early 2018.
The only mitigation is that any vouchers you convert by 13 June will come with a 12-month expiry date rather than the usual six months, allowing you to convert without necessarily having a definitive plan on how to use them.
Rob Burgess, editor of rewards website headforpoints.com, said: “This came as a bit of a surprise. Whilst clearly a big devaluation, you are clearly still getting twice the value you’d get by spending your vouchers in a Tesco store at face value, so partner redemptions are still – comparatively – a better deal.
“That said, you need to do the maths as virtually all Clubcard partner redemptions come with small print which reduces their value.”
He points out that Pizza Express vouchers cannot be combined with any freebies you may get as a member of the Pizza Express Club on their app, for example.
Hotels.com bookings using Tesco Clubcard vouchers also don’t qualify for Hotels.com Rewards, which is worth 8 per cent of the value of your booking.
“Tesco are making the changes as part of a gradual shift towards investing in price cuts rather than loyalty benefits. You never, for example, see products sold in Tesco now which come with bonus Clubcard points. These used to be exceptionally common but now you only see price reductions.”
Whilst the current changes may be caused by a need to respond to the cost of living crisis, this has been a 10-year trend by Tesco, almost certainly driven by the need to respond to the growth of Aldi and Lidl.
A Tesco spokesperson said: “We are making a change to how members can use their vouchers with our Reward Partners, but they will still be able to unlock great value in the same range of ways as before.”
Boots Advantage card
Boots has also recently made changes to its hitherto generous Advantage card scheme.
Advantage is now dropping from giving users 4 points per £1 spent, which gives customers essentially 4 per cent back, to 3 points, giving people 3 per cent back.
However, in return you will be able to get 10 per cent off all Boots own-brand products by showing an Advantage card.
Burgess said: “This might turn out to be more generous overall for many shoppers, although it is always impossible to tell if these 10 per cent savings are a trade-off for seeing fewer promotions on non-Boots products.
“I am always a bit suspicious of the value of offering cash discounts to loyalty card holders.
“It creates resentment amongst people who don’t have a card or don’t happen to have their card with them at the time – whilst you can usually claim loyalty points later if you don’t have your card with you, you can’t ask for a cash refund later to make up for the ‘member discount’ you couldn’t access.”
Boots said it had made the changes in light of changing customer feedback.
Pete Markey, chief marketing Officer at Boots, said: “Customers want to be rewarded with on-the-spot lower prices and instant value.
“We’ve also noticed that Advantage Card members are now more frequently using their points to buy essentials instead of saving them up, we’ve listened and have expanded the scheme to give more instant reward, immediate value and lower prices.”
Others could follow suit
Other retailers may also be looking to cut back their offerings.
In November, Sainsbury’s Bank cut the amount of Nectar points customers could earn by 75 per cent, from two points for every £1 spent, to one point for every £2.
Nectar is traditionally the least rewarding of the loyalty cards as one Nectar point is worth 0.5p, meaning if you earn one point from a purchase it’s the equivalent of 0.5 per cent cashback.
Church said: “M&S Sparks Card may be the next to reduce in value, as that has a fixed scheme of 10 ‘sparks’ for every £1 you spend. The other supermarkets all have variable rewards that change depending on products.”
Who else offers loyalty cards?
Many retailers now offer loyalty cards as a way to keep prices down for consumers and also encourage people to shop exclusively with them.
Church adds: “Iceland’s Bonus Card remains my favourite as it gives you £1 for every £20 you save on it. Unlike other supermarket reward schemes, Iceland Bonus Card is a savings card. You top it up with cash, and for every £20 Iceland adds an extra £1.”
When you are in Iceland or The Food Warehouse, or shopping online at Iceland.co.uk, you use your savings on Iceland Bonus Card as a method of payment. It essentially works out as 5 per cent cashback which is the most generous of all supermarkets.
Meanwhile, Asda has a Rewards app which gives users access to “Missions” and “Star Products”, which, when completed/bought, earn you “Asda pounds” that can be spent on future shops.
My Morissons gives cardholders personalised offers on the products you buy the most, including money off your next shop while the Lidl app gives money off select products each week as well as £5 off for every £100 you spend.
It’s not just supermarkets that have loyalty schemes. Superdrug has a Health & Beauty card which earns you 1 point for every £1 you spend. When you reach 100 points, you can swap them for £1 – effectively 1 per cent back on your purchases.
Greggs has a Rewards app, where you earn rewards each time you buy breakfast, pastries, sweet treats, drinks, sandwiches and bakes. You are offered food for free when you collect nine stamps in a category.
Waterstones Plus allows users to earn and redeem as you shop online, in store or their cafes. Cardholders get a stamp for every £10 they spend, and ten stamps gives you £10 to shop with.