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"LOYALTY" -- THE BIG LIE OF CLUB CARDS
an essay by Zelda Gordon

"...I wrote a letter to the State Corporation Commission when Furr's started their card, saying I thought it illegal -- like having the blacks sit in one section of the restaurant and the whites in the other -- pure discrimination..."

"...This is clearly discrimination, as I was denied the right to get the lower price for the items purchased... If groceries are on sale, all shoppers should receive the same sale price..."

These are among the first responses I had to No-Cards Shoppers. Over and over again consumers asked, How can this be legal? Isn't it discrimination?
At first the marketing industry responded with flat-out denial.

"...there is no discrimination--anyone can get a card."

Well, duh, we weren't talking about the cards, we were talking about the food prices. When we demanded that the stores give the lower price with or without the card, they had to admit the discriminatory nature of their programs in order to defend them. Yes, they acknowledged, the system "differentiates" between customers who use cards and customers who don't; but this is okay because it is perfectly legal for us to reward our loyal customers with discounts.

"Rewarding loyalty is a business practice as old as business itself....a card allows the supermarket operator to offer better prices to his best customers..."

Leaving aside whether or not the stores also have a right to rip off everyone else, let's take a look at supermarket claims that their shopper card programs reward loyal customers.

"...I figured I had spent nearly $125,000 [at Kings] in my 25 years in Denver. When I last confronted them about their program, I was completely blown off. I think it is outrageous to be treated in this manner! I should be a VIP if $$ means anything!"

"My mother has shopped for years at Safeway and I can't recall not seeing the battered little book of coupons by the back door or on the seat of her car but she hasn't been to a Safeway since this stupid card business began. I--and my mom--grit our teeth when we see a big posted price that is only for the 'clubees' and we, their loyal customers, are treated to being jerked around like prisoners of The Marketing Mafia."

"...Used to be a special price was given to a customer as a reward for loyalty. Now, it seems that we have to give something to Safeway in exchange for that special price. Nope. Not me."

Here we see another common thread in the correspondence to No-Cards Shoppers. Certainly we have collected enough anecdotal evidence now to reveal the lie of "loyalty." When the card programs come in, "loyal" customers who refuse to comply with the system are sent packing. Their protests fall on deaf ears. The stores seem not to care that these folks are taking their business elsewhere rather than pay the privacy tax or submit to tracking.

What, then, are these "loyalty" programs really about if not retaining and rewarding long-time customers?

They are about collecting data. The purpose of the data is to increase profits. In theory, the data allows the stores to target advertising dollars where they will get the most return (for example, only mailing circulars to selected zip codes), and to "reward" customers proportionate to their spending. In reality, the data also allows stores to juggle prices to their best advantage. "Loyalty" comes into the picture as a tool for persuading customers to surrender their personal information while making them feel that they do so voluntarily. The object is to condition customers to do all of their shopping at a single store. Under this highly extolled model of merchandising, "loyal" customers provide the store with just the extensive shopping data needed to guarantee that all "rewards" will be paid for by those customers who have "earned" them.

"Once you have locked in the customer's loyalty, it's time to apply qualifying levels to receive rewards. By directing your rewards towards more profitable customers, you'll increase your profitability. Ensure that your rewards are proportional to customer spending and profitability. The more a customer spends, the more she should receive, proportionally, in rewards." (Debra Kahn Schofield, The Weekly Guerilla, "What's Your Frequent Buyer Program?")

I know, it makes you dizzy just thinking about it. But that's what we get for tolerating the double-pricing scam. It is the stores' hope that you will "trust" them when they tell you that the card prices are "special." That as long as you see a few deep discounts each week, you will stop looking at prices at other stores and take their pricing at face value. If the sign says you "saved" by using your card, then you saved -- right? Of course you did. You're their loyal customer. They're rewarding you. You trust them...

And if you don't -- T'hellwidya!

"...retailers' results showed an increase in sales of 5 percent to 10 percent; an increase in profit of 1 percent to 2 percent; a decrease in advertising expenses of 10 percent to 20 percent; and a decrease in transactions by 2 percent to 4 percent. 'Less profitable transactions are going somewhere else.'" (Michael Montooth, Central Ohio Source, 9/27/96, referring to study done by independent grocery analyst Brian Wolf in "Frequent shopper cards a grocer's best friend")

Think about it -- what could be better for the supermarket than to have fewer transactions? It's brilliant! Less wear and tear on the store, fewer checkers needed. And those big spenders and family folks are so much cleaner and more cooperative than the cherrypickers and the cash customers and those midnight munchie types -- and those privacy rights freaks who hold up the check-out lines.

By the stores' own definition, there is no such thing as a loyal customer who will not submit to tracking. Such customers are not providing sufficient data to convince the store of their worthiness to be "rewarded."

Now, suppose you've been a long-time customer and are now willing to prove your loyalty. You've signed up for the card to get the "rewards" and help "your" store "serve you better." We have already seen in our price comparison that rewards are probably minimal. And what about better service? Is the data they're gathering from you really going to help them keep the products you buy in stock? Maybe, maybe not. It depends how much you buy. The data collection process not only tells the stores what to stock, but what not to stock. In shopper card stores, we see selection and variety decreasing as marketing departments figure out that certain customers who buy a given type of product are not spending enough overall to warrant catering to them.

" ...If stores can target the top 30 percent of customers and keep them, the result will be a sustaining of 75 percent of the company's sales." (Michael Montooth, Central Ohio Source, 9/27/96, quoting Valerie Frost, director of sales for Dynamic Controls Inc.in "Frequent shopper cards a grocer's best friend")

Has the Kosher foods selection of your market dwindled? Has the aisle for diabetic products been overrun with sugary breakfast cereals? Your demographic has just been dissed. To think you'd been loyal to this store for carrying just those hard-to-find products. And it's not only specialty items that are disappearing from the shelves. What about those popular regional brands that we count on for freshness and competitive pricing?

The stock clerk doesn't need our names to know which products are selling out; that's what the bar codes and computer inventories are there to tell them. When you find that your favorite products are perpetually out of stock, you can bet this is not an oversight. Someone at your store has made a conscious decision not to serve you better, or even as well. Their sole mission is to maximize profits for every inch of shelf space. Once these stores have determined that "your kind" doesn't spend enough, they don't care if you find what you need in their aisles or if you shop with them at all. So much for loyalty.

Does something seem amiss here? Does it not seem odd that the stores are now "shopping" for us -- combing their sales receipts for the right customers the way we might sort through a rack of shirts? And what are they looking for? Wealth, spending power, disposable income, expensive habits -- they're looking for rich people who eat.

I think the grocery store execs are really the ones who are being had. They sell food. Everyone eats. The more food you can move, the more you can buy, the lower price you can get, the better deal you can offer, the more customers you can attract, the more food you can move... They don't need loyalty -- they've got hunger!

Hunger, now there's a word that's hard to pervert. We all know what Hunger is, and that it does not understand "differentiation." Take Hunger to the grocery store and Loyalty starts to look a lot less voluntary. When Hunger pushes the cart, it's not thinking "rewards," it's thinking survival. The big lie of "Loyalty" is that it's some sort of reciprocal relationship between you and the store. Look through Hunger's eyes and see the truth. Greed preys upon need.

Money lust, power lust -- it's a tiny step, really, from marketing to propaganda, from commerce to war. The very word "loyalty" smacks of a line in the sand, choosing up sides, selfless sacrifice. It's code talk for the thing all fascist regimes really require, blind obedience. So, are we willing to serve as footsoldiers in some distant campaign for wealth and power? Shall we all submit to the draft or will we burn our cards? The stores have demanded a show of loyalty, making it clear that all of us who don't stand with them must stand against them. Their weapon is our food supply. We will comply or we will pay. And if we're too troublesome, will we starve...?

No Cards! Just say

NO CARDS!


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