As the festival season approaches, malls and shopping complexes are doling out discounts and special schemes for their customers. But, there is another way through which customers can benefit. That is, by being part of a mall’s or store’s special loyalty programme. There are special sale counters for them, discounts and hoards of other offers.
Loyalty programmes have become a big rage among customers and retailers in the last few years. To name a few, Lifestyle’s has a programme called ‘The Inner Circle’, Pantaloons offers a `Green Card’, Westside has ‘Club West’ and Shoppers Stop has a ‘First Citizen’ card.
And the results have been impressive, according to retail chains. Shoppers Stop claims that 65 per cent of their business is through loyalty customers. For Pantaloons, it is 55 per cent as per Zahid Shaikh, head, loyalty programme.
So, how do these programmes work? To get a membership, you need to spend at least Rs 2,000. For instance, to become a member of Club West, you have to make a one-time expenditure of Rs 2,000. The more expensive ones are Pantaloons, where to become a Green Card level-one star, the minimum expenditure is Rs 8,000.
There are options as well for consumers who want to shop in multiple stores through the same card. For instance, I-Mint is a loyalty card that can be used in multiple stores. “If the shopper uses multiple network affiliates, he will get reward points through all the members in one single transaction,” said Vijay Bobba, Chief Executive Officer, Loyalty Solutions & Research, the company that owns I-Mint.
If you are using an ICICI Bank credit card, which is a part of I-Mint’s network, and make purchases in their affiliate stores, you will get double points on a single purchase. These points can be redeemed for free gifts. Typically, for every Rs 50 you spend, you earn one reward point. On the accumulation of ‘X’ number of points, the member gets a gift voucher that can be used to shop in the affiliate stores.
Incentives include, reward points, cash discounts, customised catalogues based on previous purchases, special shopping hours during sale and free home delivery of altered clothes, among others. Yes, it does sound great for the shopaholic.
However, as far as financial planners go, they would rather have you curtail the expenses and not get too lured by such cards. Said Gaurav Mashruwala, “Most people, who are a part of these programmes, end up on a shopping spree, even if they do not need anything new. Adding points to the card is almost an addiction.”
According to him, typically one should follow the principle of PIPE, which stands for pre-pone investments, postpone expenses. However, through such cards, consumers often do the reverse - pre-pone expenses, postpone investments.
Also, another grouse against such cards is that to keep on going up the ladder or get premium status (for more discounts and schemes), you have to incur high costs.
That is, at Pantaloons, purchasing merchandise worth Rs 40,000 in one year would lead to a ‘Green Card’ seven star status.
Further, if you do not visit these retailers frequently or not willing to run a high enough bill, these cards may not have much to offer.
