Aldi attacks loyalty ‘schemes’ as a manipulative waste of time

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Aldi has attacked Australia’s two biggest supermarket chains, saying that loyalty schemes manipulate shoppers and benefit only shareholders.

The German discount chain says loyalty programs are a waste of time, and cost shoppers up to $1500 per year while forgoing savings at the checkout.

Consumers can wait years before accruing enough points to earn free or cheap flights, discount vouchers and household appliances, says Aldi.

Aldi has launched a biting, yet slightly tongue-in-cheek, advertising campaign to alert members of Coles’ Flybuys and Woolworths’ Rewards programs that they are being duped by the promise of rewards instead of paying low prices every day. It has also launched a “loyalty calculator” to show customers how long it will take – and how much it will cost in real dollars – to get a reward.

Aldi’s calendar shows that if a customer spent $175 a week on groceries, it will cost $2000 and take just under three months to earn enough points for $10 off their next shop. It also revealed that if a customer earnt one point per dollar spent, a one-way Qantas ticket from Sydney to Brisbane, usually costing just $135, would take two years and $18,400 to redeem.

Aldi head of customer service Adrian Christie said that a shopper waiting to earn enough points for a Tefal frying pan, which costs $60, would have to spend $1500 and wait 19 months before having enough points to redeem it.

Aldi claims the same customer would save $60 on their grocery bill in a fortnight by shopping at Aldi and be able to buy the frying pan outright.

“It’s not a mistake that the words ‘loyalty’ and ‘scheme’ are used together as they are a scheme; there is some sort of manipulation going on,” Mr Christie told news.com.au.

Research shows that nine out of 10 Australians are in a loyalty program, with 60 per cent of them saying these schemes influence the way they shop and 36 per cent saying they spend more because of perceived benefits.

“A loyalty program is great for insights that can manipulate and can help shape the market. But in terms of value, is that value for the customer or for the shareholder?” he said.

“Loyalty schemes entice you to spend more, so customers need to realise what they are giving up for the rewards.

“If you spend $20,000, that might get a new toaster but if you were buying a car and the salesperson said, ‘We’ll throw in a free toaster,’ I’m not sure it would get you over the line.”

Mr Christie says that customers could save, on average, $28 on a $175 spend and put the savings towards purchases. Aldi claims that its customers save an average of $1500 per year by being ‘loyal’ to the German brand.

“Our approach to loyalty is to provide good prices,” said Mr Christie.

Are you a member of a loyalty program? Do you find you are sufficiently ‘rewarded’? Or do you pile up points without purpose? Would you trade a better deal on points for lower everyday prices?

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Written by Leon Della Bosca

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56 Comments

Total Comments: 56
  1. 0
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    I noticed those Loyalty points are all about you spending more money. There is no value in them at all. They are used to track what you buy and how much you spend and assist the supermarket chain on how to try and make you spend more.

  2. 0
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    Loyalty programs of any description are, and always have been, a clever marketing ploy to extract maximum dollars from the consumer. Do your own sums!

  3. 0
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    Loyalty points are like anything else. Learn the rules and play the game your way not theirs.

    By what you need and if it gets you points good but don’t chase points. Sign up for their emails too as there are some good incentives in them if they think you have deserted them for the opposition. Once got one If I spent $50 they would give me $100 to spend on next shop with Woolies. Last week Woolies sent me a good deal as it was my birthday. We have a card each and use one for awhile and when they incentivise the other one use it for awhile and repeat.

    On recent flights to US added my Velocity Card number and now have enough points for 25c a litre off my fuel for about a year.

    Lets face it ALDI doesn’t have all teat we need so we have to shop elsewhere as well. So why not use their reward system for a bonus. I have also noticed that ALDI’s prices are getting close to the other supermarkets now so the other supermarkets incentive programs may be starting to entice shoppers away from ALDI.

    ALDI also charge me if I use my credit card but the others don’t. So I use my credit card at the others and accumulate points which helps me get one domestic return flight a year for free.

    Does it entice me to spend more? No it doesn’t as I write and list and only get what’s on that list.

    I read a similar article a few days ago and my first thought is that ALDI is losing customers as it’s prices are now close to the others but the others have an added incentive that ALDI doesn’t have.

    • 0
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      Exactly the way we use our cards, Old Geezer. We only buy things we need anyway and we buy them when we are offered a discount of 20% or more.
      Got incentives as well for BWS with Woolies Rewards, gives me prices like Dan Murphys without having to drive 12 km.
      We have all 3 – Coles, Woolies and ALDI in the neighborhood and use them all. At Aldi we use cash and credit cards at the others. OG is right about Aldi’s prices are very close to the traditional supermarkets and they do not have a Deli (at least not here).
      Shop where it is convenient, take the points but do not chase them.

    • 0
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      Spot on Old Geezer, you are rewarded more by NOT using your rewards card. Coles and particularly Woolies will send you attractive offers not available to the general public if they think you have stopped shopping there.

    • 0
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      I rarely drink anything alcoholic but do gets lots of good BWS offers. That said ADLI has a good red for $5 a bottle that good in cooking. ALDI also has a port or fortified wine Keepers Glove for $5 that if left for 12 months tastes good too. Only found out about it as I left a bottle in the van in case someone wanted a drink. One night around a campfire we thought we would get it out and be sociable.

    • 0
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      Got a voucher from Woolies with their dividend too.

  4. 0
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    I think loyalty cards are good if you just collect the points buying things you need. Also you can often get double or triple points by subscribing to their emails. Plus the card sometimes gets you a nice discount or freebie at associated outlets such as fuel and alcohol.

    I think Aldi is ignoring “specials” at Coles/Woolies in making the price comparisons too and just using every day prices. We buy a lot of things we need on special at Coles/Woolies especially if they are on half price.

    • 0
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      Yes I use my cards (both Woolies and Coles) each time I shop, and I do activate the rewards on the emails I get regularly but only purchase if I really need them – it does not alter my shopping patterns.
      I have had several $10, $20 and $50 money off my shop vouchers over the last few years plus other vouchers one can also choose.
      Aldi leaves me cold!

    • 0
      0

      Spot on Dave. You need to click on those email for bonus points and other special offers. Between my mum and I, we redeem $10 discounts between two to three times per month simply by scanning vouchers, clicking emails and using first liquor for special offers. I have both Woolies and Coles cards but think the Coles scheme is way better. I’m yet to redeem a Woolies $10 discount because it takes too long. Taking advantage be of special pricing is the best way to save cash. I’m not plugging Coles but keep in mind that open Woolies shares.

      ALDI, unfortunately add that cc surcharge. If you were to spend $2000 for 2000 points, for a $10 discount, then this equates to 0.5% discount..the same as the Aldi surcharge!

  5. 0
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    I use a Woolworths Reward card. It doesn’t effect one iota the way in which I shop. I buy the low priced items at Aldi and items they don’t stock in Woolworths. I ignore Woolies promotions unless I actually want the product. There should be no blame on the reward card. People have free will to make purchasing decisions. (There again, people cannot have free will in a deterministic world)

    • 0
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      If you haven’t subscribe to Woolies reward card emails as there are some good deals in them. I activate them all and only write a note of the good ones and the others I just et surprise me.

  6. 0
    0

    I use my Flybuys card to convert points to Velocity [also a member of that]. This gets me $10 off fuel when I fill up at the BP servos, and that is a heck of a lot more than the miserly 4c per litre you get from Woolies and Coles branded servos! So I’m happy with that arrangement – that 4c was introduced back in the 90s when petrol cost less than $1 per litre, pretty useless now that it’s so expensive. I also have a Woolies card – occasionally that gets me a good special on some items. I love shopping at Aldi, but agree this advertising campaign is aimed at getting people in. Probably because as some said in the comments, Aldi is no longer significantly cheaper than the big supermarkets 🙂 On the other hand, Aldi is still way cheaper on some grocery items, so I make a point of going there for my fruit and vegies. I have an Aldi in the same centre as my local Woolies, wish that centre also had a Coles but hey, can’t have everything!

    • 0
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      I’d check the pump prices carefully Infinityoz. I have both Caltex and BP near me and the BP is ALWAYS 12-15c a ltr higher than Caltex before the discount is applied. I never use BP servos for that reason.

    • 0
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      You can change that $10 off fuel to a higher amount if you log into velocity. $10 is the minimum.

      NRMA also gives you 5c a litre off Caltex as well. You just have a bar code on your mobile phone which they scan.

  7. 0
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    Aldi is correct. Most of the ‘offers’ are a scam and total lie. Some items are always ‘half price’ and others are highly inflated. The public is indeed being conned.
    Our way around this is to split our shop around 4 players so we come away with the best of a bad lot.

    • 0
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      With 4 players you are lucky indeed, Mick. We have 3 here, where we lived before we only had Woolies (no BWS as it was in Queensland). Now we are in clover.

    • 0
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      Yes. If more people played the game and put themselves out rather than simply go into a shop and buy everything then real competition might occur. Not holding my breath though because there is a price to pay for apathy.

  8. 0
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    Old Geezer is quite right. Shop for what you need at the stores you would normally use and don’t ‘chase’ points. Then any points you do get are a bonus. Over the years I have been able to redeem points for activities I wanted to do but would not have afforded under normal circumstances such as sailing on Sydney Harbour, climbing Sydney Harbour Bridge, even a scenic helicopter ride. Then there’s also been things like afternoon tea in a posh hotel, dinner for two which are great treats for no extra money than was spent on grocery or clothes shopping anyway!

    • 0
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      I agree and see it as just a bonus. I have an old credit card I need to change for one that has travel insurance that I like but I can’t decide which one has the best rewards for me. Both have no annual fees so look like I will have to toss a coin.

  9. 0
    0

    OK here is some tips.

    If they offer me say 10,000 points to spend $100 for 2 weeks I say no that’s not doable.

    If the offer is 6000 points if I spend $40 for 2 weeks then I’llw rite that one down as that is doable.

    If the offer is 10,000 points if I spend $40 for 4 weeks not that’s too much for me to keep track of.

    We check out the weekly catalogues every Monday night and write down what we might use. At the end of the week whenever we go shopping we work out what we need and cross off all those things on our specials list we don’t want and substitute some of the specials for other things we need. Then we have a list for each supermarket. IGA gives 5% off for seniors on Thursdays but I can rarely find anything that is cheap enough with them that we need. We then have a day in town shopping and doing all the other chores. We just buy what is on the list. If one puts something in the trolley that’s not on the list the other one takes it out.

  10. 0
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    Aldi’s everday items are cheaper – Aldi’s everyday customer service is a pile of crap and they treat you like a diseased animal when you get to the check out. It is with good reason Aldi’s don’t like things like loyalty or decency.

    • 0
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      ALDI’s prices are getting very close to the majors now and most prices are not much if any cheaper. Their fruit and veg doesn’t last as long as the other supermarkets so you have to only buy what you can eat in next day or two. That’s fine if you shop every second day but not good if you shop weekly or longer like we do.

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