Consumer NZ warns of pitfalls of supermarket loyalty schemes

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New Zealand’s Countdown supermarkets have just rebranded as Woolworths, it is also rebranding its loyalty card.
Photo: Supplied

A consumer watchdog is warning deals offered by supermarket loyalty schemes are not as cost-saving as they appear.

Woolworths has announced a new loyalty programme, Everyday Rewards, to replace OneCard – offering extra rewards for those who join.

The new programme, Everyday Rewards, will use the same points-based system as its former OneCard did, offering the same $15 voucher for every 2000 points.

Woolworth director of digital and loyalty Mark Wolfenden said there was value in the change, with a multi-million dollar increase in rewards.

But Consumer NZ’s head of research and advocacy Gemma Rasmussen said these schemes did not offer the best deal.

“What they’re really about, is trying to breed loyalty. They’re trying to ensure that you shop at the same place, all the time. That’s really beneficial for the supermarket and it mutes the competition.”

Rasmussen said it paid to shop around, and that keeping competition between supermarkets was a good thing.

A Consumer NZ analysis of loyalty card specials at New World and Woolworths found 75 percent of special loyalty prices could be found cheaper elsewhere.

Rasmussen said that as well as not being the best value, loyalty card schemes were designed to gather users’ data.

The privacy policy for the new Everyday Rewards card was longer – and that meant more data was being gathered, she said.

“The supermarket may share your information, your data, with operational and tech providers, with advertisers, social media, and search engines like Google.

“Simply by using the card they are agreeing to the terms and conditions.”

Rasmussen said supermarkets could a track user’s shopping habits, as well as gathering their name, address, date of birth, or even video and audio footage from in the store.

Everyday Rewards also partners with ASB Visa rewards, BPme and Vineonline, offering 3000 loyalty points when users link their accounts.

This, alongside personalised offers that came with the new cards, were all based upon data sharing, Rasmussen said.

“If they are offering personalised deals to specific shoppers, it means they are gathering a lot of data and creating a really comprehensive picture in the way that you shop, also potentially how much money you are earning and what you’re preferences are.

“What we would stress about these deals is that they are really not that significant and it does pay to shop around if you can.”