Big UK retailers accused of ‘dubious discounts’ on loyalty card offers

Boots, Superdrug and the big supermarket chains have been accused of “murky and confusing” practices on loyalty card offers that may not be as good as they appear.
Boots was responsible for one of the most egregious examples of what the consumer group Which? called “dubious discounts” highlighted by its investigation into the pricing history of almost 12,000 products on a “snapshot day” in May.
The chemist offered an Oral-B iO7 electric toothbrush to loyalty card holders for £150, marking this as a discount to the £400 price for non-members. However, the product was only priced at £400 for 13 days before the offer appeared – before that it was £150 for everyone.
Which? said it found 649 products at Boots where the price for non-members was raised on the same day the loyalty promotion began.
Boots said its loyalty scheme enabled customers “to make genuine savings on over 8,000 products”.
While some of those products could have been on a different kind of promotion immediately before the loyalty discount was launched, Which? said the evidence raised “questions about the tactics at play” and whether the non-member prices used to highlight the “supposed savings” were genuine.
It said 10% of the chemist’s products subject to a loyalty-scheme “discount” had been at the comparable price for non-members for less than half the previous six months.
At Superdrug, one in six (16%) of the products had been at the non-member price for less than half the previous six months.
The retailer said its loyalty scheme gave members “access to hundreds of health and beauty products at a lower price”.
Among supermarkets, Tesco’s Clubcard scheme had the largest proportion of loyalty discount products that had been at the non-member price for less than half the previous six months – at 10%.
The supermarket said it had “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.”
Ele Clark, the retail editor at Which?, 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.
“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.”
Clark said the UK’s competition watchdog should clarify how rules on pricing related to loyalty scheme discounts and be “ready to use its new powers” to take action against retailers that did not comply.
Meanwhile, the Competition and Markets Authority (CMA) is investigating the effect on consumers of the rise of loyalty card price cuts amid concerns they could limit competition and lead to price rises for shoppers not signed up to such marketing schemes. The regulator expects to report on its findings in November.
However, in July, the CMA said initial analysis of thousands of grocery prices indicated it was unlikely that supermarkets were artificially inflating the price of everyday goods to make the prices for loyalty card holders appear misleadingly attractive.
Responding to the Which? investigation, a Boots spokesperson said: “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.”
They added: “All promotions, including Price Advantage, are assessed against all applicable laws and guidelines set out by the Chartered Trading Standards Institute.”
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.”
They added: “As an accessible retailer, we aim to offer great value to all our customers … We regularly compare prices in the market to ensure they are competitive and offer genuine value and savings.”