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Consumer group raises concern over loyalty card 'challenges'

Consumer group raises concern over loyalty card 'challenges'
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Supermarket loyalty card challenges that reward shoppers for buying more could lead to overspending, a consumer group have warned.

According to recent reports, consumer group Which? and debt charity StepChange warned that the recent trend of setting shopping challenges could encourage people to spend more than they can afford.


"Competition between supermarkets is fierce at the moment, with all of them shouting about the number of prices they've dropped," said Ele Clark, retail editor at Which?. "But the fact remains that overall food is still far more expensive than it was a couple of years ago."

“With many families struggling to make ends meet, it’s important supermarkets don’t go overboard with these challenges and encourage shoppers to spend beyond their means in order to access rewards," Clark at Which? told the BBC.

Simon Trevethick, head of communications at StepChange, said, "While retailer loyalty schemes can provide helpful discounts for customers, there’s a risk that if spending is incentivised, people may end up spending more than they had initially planned or can afford."

Four of the UK's biggest supermarkets - Tesco, Sainsbury’s, Asda and Morrisons - are now offering members of their loyalty schemes bonus points if they hit spending targets. The supermarkets all say their schemes offer customers better value and more personalised savings.

These challenges are the latest development in supermarket loyalty card schemes which are becoming ever more sophisticated.

Responding to the warning, a Tesco spokesperson told BBC that its challenges were "all about rewarding customers for buying the products they regularly purchase".

Sainsbury's said bonus points were "issued based on the number of shops customers complete, with a minimum qualifying spend of £1 per shop".

This comes as Competition and Markets Authority recently announced a review of loyalty pricing by supermarkets in January 2024.

It is examining whether loyalty prices are a genuine promotion or could mislead shoppers, if they put any groups at a disadvantage and whether they impact shopping habits and how supermarkets compete with each other. An update on its findings is expected in July.

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