UK retail giants slammed for dubious discounts on loyalty card benefits | Retail

Boots, Superdrug and other major supermarket chains have been accused of being vague and confusing when it comes to loyalty card benefits, which may not be as good as they seem.

Boots was responsible for one of the most notorious cases of what consumer group Which? called suspicious discounting, highlighted when it examined price records for around 12,000 products on a single snapshot day in May.

The drugstore offered the Oral-B iO7 electric toothbrush for $150 to loyalty card holders, while listing it at a discounted price of $400 for non-members. However, the product only sold for $400 for 13 days before the $150 offer went live for everyone.

Which? revealed that it found 649 items at Boots that had been priced higher for non-members on the day the loyalty promotion launched.

Boots says its loyalty program allows customers to enjoy real-world discounts on more than 8,000 products.

Some products may have run other types of promotions just before the loyalty discounts were launched, but Which? says the evidence raises questions about the tactics used and whether the non-member prices used to highlight what are believed to be discounts are genuine.

Pharmacies said that 10% of products offering loyalty discounts were sold at the same price as non-members for less than half of the past six months.

At Superdrug, less than one in six (16%) of our products have been sold at a non-member price for less than half the time in the last six months.

The retailer said its loyalty program will offer members cheaper prices on hundreds of health and beauty products.

Among supermarkets, Tesco's Clubcard scheme had the highest proportion of loyalty discount items at less than half the non-member price, and the highest discount rate at 10%.

The supermarket said it offers thousands of genuine savings every week with Clubcard Prices. All Clubcard Prices promotions follow strict rules, including comparing them to market prices to ensure they represent genuine value and savings.

Which?’s retail editor, Elle Clarke, said: “Loyalty cards are becoming a bigger business and with the explosion of two-tier pricing, shoppers who aren’t part of a retailer’s programme are often paying significantly more.

We looked at price history for thousands of products, and while most of the discounts were not misleading, there were some questionable non-member prices, and some that looked downright fraudulent. Meanwhile, some products were always, or almost always, included in loyalty promotions, making it hard to spot the real deal.

Clarke said the UK's competition regulator must clarify pricing rules around loyalty programme discounts and be prepared to use new powers to take action against retailers that do not comply.

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Meanwhile, the Competition and Markets Authority (CMA) is investigating the impact on consumers amid concerns that loyalty card price cuts could limit competition and lead to higher prices for shoppers who do not sign up to such marketing schemes. The regulator is due to report its findings in November.

But the CMA said in July that its initial analysis of thousands of grocery prices found it was unlikely that supermarkets had artificially inflated the prices of everyday items to make them appear misleadingly attractive to loyalty card members.

In response to the Which? survey, a Boots spokesperson said: Price Advantage allows loyal Boots Advantage cardholders to enjoy genuine savings on over 8,000 products. As well as enjoying lower prices, customers also enjoy a range of other benefits.

They added: All promotions, including price benefits, are assessed in accordance with all applicable laws and guidelines set by the UK’s Chartered Trading Standards Institute.

A Superdrug spokesperson said: “We regularly offer a mix of members-only deals, bulk buy promotions and price promotions that everyone can participate in, ensuring that all our customers can save money on their favourite products all year round.

They added: As an accessible retailer, we aim to provide the best value to all our customers. We regularly compare prices across the market to ensure we maintain competitive pricing and offer real value and savings.

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