It was Groucho Marx who famously stated, "I would never belong to any club
that would have me as a member."
Smart guy. If he were still around today Groucho would never find himself at
the checkout counter fumbling through dozens of club cards. Of course for his
obstinence he'd have to pay exorbitant prices, and most other shoppers would
figure he was nuts.
|Personally, I haven't
enjoyed being in a club since Cub Scouts. Yet, I'm in the Sandwich Club (at my
local store you buy five and the sixth sandwich is free); I'm in the Yogurt Club
(where the 11th is free); I also belong to the Wellness Club at the pharmacy,
the Rewards Club at the bookstore, plus the Video Club and the Carwash Club to
name just a few. When I travel I try to always stay at the hotel that honors
my Gold Club Membership. And day in and day out there's the biggest fraternity
of all: the Supermarket Club.
A company in Cincinnati that keeps track of these things says American consumers
now hold 1.8 billion memberships in retail clubs, or "loyalty programs" as
the industry terms them. That works out to 14.1 memberships per household.
And what are consumers getting for all this besides a bulge in the wallet, as
more cards squeeze in where the cash used to be? Not many bargains, that's for
sure. It's been pretty well documented that virtually all retailers offering
discounts to club members have jacked up prices so that members wind up paying
about the same as they would at a store that didn't have a club.
The primary benefit to retailers is that clubs allow them to gather data about
customers’ habits and preferences. This information is valuable in designing
the next round of promotions and sales, as well as targeting e-mail offerings
to club members based on their purchasing history.
Then there's the "loyalty" piece, which presumably draws consumers
to stores to which they "belong." Trouble is, with nearly 2 billion
memberships out there, many consumers now have cards for every shopping occasion.
How much loyalty can, say, each of the three pharmacies in a town expect if shoppers
carry cards from all three stores?
Rite Aid, which launched its Wellness Club just eight months ago, has already
enrolled 29 million members. To promote loyalty, Rite Aid offers three levels
of membership -- Plus, Silver and Gold -- with rewards growing at each plateau.
As the Los Angeles Times put it, the goal of all such clubs is “to cater
to the deal addiction of cash-strapped customers.”
Like South American countries that balance the books by revaluing their currency,
many merchants are upping their club deals by selling admission to higher levels
of membership. At Borders books, for example, the plain old Rewards Card is still
free, but now there's the Rewards Plus Card that sells for $20 a year and provides
better discounts and other perks. GameStop also has a free club, but now sells
membership in its Power Up Pro section for $14.99.
These schemes may be intended to make elite members feel special, but the actual
effect seems to be that regular shoppers feel left out and ripped off.
Supermarket News magazine quoted a store owner in Bend, Ore., Rudy Dory, who
actually said, presumably with a straight face, that his program is designed
so that employees can identify club members and treat them with “extra
friendliness and consideration.”
That really gets to the heart of why Groucho would have hated shopping clubs.
Here’s a final thought from the comedian who, it seems, was quite the prescient
shopper: "I have a mind to join a club and beat you over the head with it."
(c) Peter Funt. This column was orginally distributed by the Cagle Syndicate.
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