Which? calls for action to tackle murky and confusing loyalty pricing practices
Which? is calling for action to tackle murky and confusing loyalty pricing practices after its latest research raised concerns that some deals may not be as good as they appear - and found examples of non-member prices that are seemingly an outright rip-off.
The consumer champion analysed the pricing history of almost 12,000 products at health and beauty retailers and supermarkets to uncover how genuine the loyalty savings were - exposing products with dubious discounts and items that are always on loyalty promotion deals, suggesting they do not always offer the value for money consumers might expect.
The investigation found concerning membership pricing practices at Boots and Superdrug and at supermarkets.
Which? surveyed shoppers* and over half (55%) thought the non-member prices were higher than the usual selling prices of those products at the same retailer. Some shoppers even said they were suspicious that shops are hiking the non-member prices for some products to make the discounts seem better than they are. This is difficult to prove, so Which? set out to investigate.
The consumer champion believes the findings show why the guidance on how consumer law applies to pricing promotions needs to be updated to clarify how it applies to loyalty pricing, which is being adopted and rolled out across thousands of products by major retailers.
Better guidance would help businesses stay on the right side of the law and help regulators to take faster, effective action when shops flout the rules. The Digital Markets, Competition and Consumers Act will also soon give the Competition and Markets Authority (CMA) powers to hit businesses with fines, without going through the courts, to enforce the law.
On a snapshot day, Which? researchers looked at how many times the non-member prices on items with loyalty discounts had been in place during the previous six months.
At Superdrug, one in six (16%) of the products had been their non-member price for less than half the time. At Boots it was one in 10 (10%). For supermarkets, it was 10 per cent at Tesco, five per cent at Sainsbury’s and three per cent at Co-op.
Which? identified cases where prices were raised to a higher price for a relatively brief period before going on “offer”. An example Which? found at Superdrug was an Ultimate Day & Night Duo - Olay Regenerist & Retinol Bundle. This product was £71.98 for non-members, while for members it was £59.99. However, this product was only £71.98 for 13 days. Prior to that it was £35.98 for everyone.
At Boots, an Oral-B iO7 electric toothbrush (blue) was at a non-member price of £400, while the members price was £150. This product was only £400 for 13 days before, prior to that it was £150 for everyone.
Which? found 649 products at Boots where the price for non-members was raised on the same day the loyalty promotion began. Some of these might have been on a different kind of promotion immediately before the loyalty price launched, but the change raises questions about the tactics at play and if the non-member prices used to highlight the supposed savings are genuine.
Which? research found Superdrug’s loyalty prices offered an average 33 per cent off the higher non-member price. The three biggest supermarkets in the investigation all offered similar savings to each other: 25 per cent at Morrisons, 24 per cent at Sainsbury’s and 23 per cent at Tesco. Co-op and Boots both offered 10 per cent.
These discounts can look substantial but Which? believes the real question is whether they are genuine. If the non-member price has not been in place very long, or is much higher than the price at other shops - an issue Which? found evidence of during its investigation - the discounts may not actually be as good as they appear.
Last year, Which? revealed that some loyalty prices at Sainsbury’s and Tesco were not as good as they seemed - sparking a CMA probe into use of loyalty pricing in the grocery sector, with a report due later this year. It is important that the regulator clarifies how consumer law should apply to loyalty pricing. As part of this, the guidance on pricing practices, which is overseen by the Chartered Trading Standards Institute (CTSI), should be updated to provide greater clarity on how the rules should apply to loyalty pricing across sectors to ensure consumers are not misled.
The CMA must also continue to closely monitor loyalty pricing practices across key consumer sectors and be ready to use its new powers to take action against businesses that break the rules.
Ele Clark, Which? Retail Editor, said:
“Loyalty cards are increasingly big business, with the explosion in two-tier pricing meaning shoppers will often pay a lot more if they aren't a member of the retailer's scheme. But while the discounts can look impressive, many shoppers are growing suspicious of non-member prices that seem high.
“We looked at the pricing history of thousands of products and found that, while the majority of discounts were not misleading, there were some questionable non-member prices and some examples that looked like an outright rip-off. Meanwhile some products were always, or almost always, on loyalty promotion, making it difficult to spot a genuine deal.
“Guidance on pricing laws needs to be updated to include loyalty pricing, to help regulators crack down if businesses break the rules. The CMA should continue to monitor loyalty pricing practices across key consumer sectors and be ready to use its new powers to take action against retailers that don’t comply.”
-ENDS-
Individual examples
Additional product examples at supermarkets:
At Morrisons, Lindt Lindor Cornet Blood Orange Truffles (200g) were at a non- member price of £6.30 but had a member price of £4.50. Which? found that the £6.30 price was only in place for just over a month before the loyalty promotion started. Before that, the chocolates were £5 for everyone. This product was on another promotional discount that did not require a loyalty card.
At Tesco, Stella Artois Premium Lager Beer Cans (18 cans x 440ml) were at a non-member price of £16.99, but members paid £13. These beers had only been £16.99 for seven days before the loyalty promotion started and before that they were £15.99 all the way back to November.
At Sainsbury’s, Ariel All-in-1 Pods Washing Liquid Capsules 39 Washes were £10.50 for non-members but £9.50 for members. They had only been £10.50 for 28 days. Before that they were £10 for everyone and just over two months earlier than the snapshot day they were £9.50 for everyone.
At Tesco, Ambre Solaire Ultra-hydrating Sun Cream Spray SPF30 200ml was £8 for non-members, £6 for members. But it had only been £8 for 14 days. Before that it was £6.
Examples of the non-member price being higher than the price at other shops:
Looking at loyalty promotions on branded goods where the non-member price had been in place less than half the time over the previous six months, Sainsbury’s prices were 13% higher than Waitrose’s, while Tesco’s prices were 10% higher than Waitrose’s. This is surprising given Waitrose is regularly the most expensive supermarket in Which?’s monthly price comparison.
For example, Birds Eye Chicken Nuggets with Golden Wholegrain (695g) were £5.50 for non-members at Sainsbury's and £4 for members. These were £5.25 at Waitrose and only £4 at Asda for everyone on that same day.
And even at Sainsbury's, they were at £5.50 for just three weeks before the loyalty offer launched. Before that, they were £5 for everyone.
Right of Replies
A Boots spokesperson said: “We have always been committed to offering customers great
value, helping them save money across their health and beauty needs. Price Advantage
allows our loyal Boots Advantage Card customers to make genuine savings on over 8,000
products. Customers benefit from the lower prices as well as enjoying several other benefits, including personalised offers, Advantage Card points every time they shop and an always on 10% discount on Boots own brand products. Additionally Boots offers a continuous and extensive programme of deals and promotions for all customers, that we know they love. All promotions, including Price Advantage, are assessed against all applicable laws and guidelines set out by the Chartered Trading Standards Institute.”
A spokesperson for Co-op said: “We know our Member prices provide true value for our
Members. No base prices have increased to accommodate Co-op member pricing and, in
fact, many of the ‘all-customer’ prices were decreased to ensure Co-op was competitive on key lines for all shoppers, whether they are a member or not.”
A Morrisons spokesperson said: “We have highlighted to Which? that in all three of the
examples they shared the ‘before’ price was in fact a promotional price rather than the base price. We are working hard to keep prices down and competitive for our customers and our More Card members can earn points on selected purchases, including fuel, and redeem those points for fivers off their shopping. They also benefit from market-leading discounts as well as personalised offers and surprises.”
A Sainsbury’s spokesperson said: “More people are choosing to shop at Sainsbury’s and we know our customers are savvy shoppers, who understand that factors like inflation, products falling out of season or promotions can affect our prices. That doesn’t stop us following pricing guidance for the industry and offering great value on the products our customers buy most – whether that’s with our Low Everyday Prices, Aldi Price Match or Nectar Prices.”
A Superdrug spokesperson said: “Our products are regularly on a mixture of member’s only prices, multibuy promos, and price promotions open to all, to ensure all our customers can make savings on their favourite products throughout the year. Every month we give our loyal Health & Beautycard members access to hundreds of health & beauty products at a lower price and the investigation highlights the value this offers our members. As an accessible retailer, we aim to offer great value to all our customers, and we prioritise working with our suppliers to secure the lowest costs possible to offer the best price. We regularly compare prices in the market to ensure they are competitive and offer genuine value and savings.”
A spokesperson for Tesco said: “Clubcard unlocks the best value at Tesco, with thousands of genuine savings on offer with Clubcard Prices each week. All our Clubcard Prices promotions follow strict rules, including considering how they compare against prices in the market, to ensure they represent genuine value and savings, and these rules have been endorsed by our Trading Standards Primary Authority.”
Notes to Editors
Which? believes that loyalty cards and the discounts they allow should be available to everyone. Several loyalty cards have restrictions and penalise those of a certain age or those without a registered address. The consumer champion also expects retailers to ensure every member-only price offers a genuine discount, and will continue to spotlight instances where it appears not to.
Supermarket prices taken 23rd May 2024. Boots and Superdrug prices taken 8th May 2024.
Prices provided by an independent pricing provider and don’t include multibuys but do include discounts available to all where applicable.
*Which? surveyed a nationally representative sample of 1,970 people from June 6th-8th 2024 who shopped at least once online or instore in the previous six months.
Sample sizes:
To calculate average discount - Boots 1,798, Co-op 208, Morrisons 45, Sainsbury’s 4,820, Superdrug 898, Tesco 5,204. These statistics are based on the median discount.
To calculate the number of times the non-member price on a snapshot day had been in place during the previous six months - Boots 1,755, Co-op 203, Sainsbury’s 4,475, Superdrug 718, Tesco 4,604.
To calculate instances where the price for non-members was raised on the same day the loyalty promotion began - Boots 1,697.
To calculate the average difference between non-member prices and prices for other stores on the same snapshot day - Tesco 143, Sainsbury’s 111. This is compared to Waitrose for branded products where the non-member price had been in place less than half the time over the previous six months.
Useful links
Last year’s Which? loyalty card investigation
26 July 2024 - CMA update on loyalty pricing in the groceries sector
About Which?
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.
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