Checking out grocery stores' discount cards

July 06, 2003|by ANDREW SCHOTZ

The average wallet (or keychain) is loaded with discount cards - one for the grocery store, another for the gas station, one for the drug store. There may be other cards for airlines or hotels.

Giant Food Stores spokesman Denny Hopkins and Weis Markets spokesman Dennis Curtin said that about 80 percent to 90 percent of their shoppers use discount cards when they buy groceries.

Not everyone has conceded this new lifestyle, though. Some people reject loyalty cards as nothing but a way to gather personal information about them and monitor what they buy.


One such activist group is called Consumers Against Supermarket Privacy Invasion And Numbering, or CASPIAN.

Not only are loyalty cards the next step toward a total surveillance society, but they create a false sense of discount, said Katherine Albrecht, CASPIAN's founder and director, who lives in New Hampshire.

Manufacturers drive most discounts in card programs, allowing stores to mark down those items. But the discounts are only available to customers who present a loyalty card - or if a cashier swipes a store card on their behalf.

The cashier scans a card into a computer that automatically applies discounts to eligible items.

Food Lions cuts the prices on about 2,400 items a month through its MVP Card program, chain spokesman Jeff Lowrance wrote in an e-mail interview.

Most card programs don't stop there.

The local Giant chains - Giant Food Stores in Pennsylvania and Martin's Food Markets in the Tri-State area - double the value of coupons presented when a BonusCard is used.

Weis Markets sometimes introduces other specials, such as the current "buy four half-gallons of ice cream, get one free." The first four purchases, which can be made over a period of time, and the freebie are all tracked through the Weis Preferred Shoppers Club card, Curtin said.

The Giant and Martin's stores frequently let shoppers accumulate points from separate purchases during a limited period, usually several weeks. Shoppers who reach benchmarks in spending points qualify for discounts ranging from 3 percent to 15 percent on a subsequent trip to the store.

Food Lion uses its MVP Card program to offer instant discounts, but also mails coupons and product promotions to customers' homes.

Giant and Martin's stores give customers coupons on the spot, along with their receipts. Usually, a manufacturer provides a coupon for the same product that a customer just bought, or a similar one.

Sometimes, the coupon is from a manufacturer competing against the manufacturer whose product you just bought, Hopkins said, but that doesn't happen often.

He said most BonusCard club members "have grown to like the program."

"The MVP Card program helps Food Lion show appreciation for its shoppers who use the card by providing additional savings ...," Lowrance wrote. "Food Lion believes the MVP Card program is a good way to build and reward customer loyalty."

Albrecht questions whether the savings are real. She said her organization has studied pricing through shopping trials in which the same set of random items was purchased at different stores. The total bill is cheaper at stores without loyalty cards than at stores with cards, even counting items that receive card discounts, she said.

Curtin said this wouldn't be true if his chain were included.

"Clearly, this woman has not shopped a Weis Market store," he said.

Albrecht also said it's not unusual for a chain to increase the price of an item, then drop it back to around its normal level through a card discount, creating good feelings among customers.

Hopkins disagreed.

"We do not inflate prices," he said.

Highly competitive

All three grocery chain representatives concurred that their industry is highly competitive for prices.

Hopkins said each Giant and Martin's store has two or more full shopping carts at the entrance to show how their prices for that basket of items was cheaper than the competition's prices.

In Hagerstown, the main competition is between three chains with loyalty cards, so it may not be possible to test the CASPIAN hypothesis that a non-card chain would be cheaper.

To enroll in the card programs, customers must provide information about themselves.

Giant and Martin's stores ask for name, address, a signature and how many people are in the household and how many of those people are under 10 years old.

Customers also are asked for their phone numbers and e-mail addresses and the ages of people in their household, but all that information is optional.

The Weis Preferred Shoppers Club application asks for name, address, phone number, date of birth and e-mail address.

Food Lion customers are asked to give their name, address, phone number and e-mail address. According to Lowrance, the customer can omit everything but his or her name, although the application does not explain that. Without an address, though, customers can't receive coupons in the mail, he wrote.

Each application allows card members to opt out of receiving special offers.

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