The Price Of Loyalty

Posted 2/6/04

Imagine stopping at your favorite grocery store to pick up a half gallon of orange juice. You pay $3.19. The guy behind you buys the same juice but only pays $2.99. He has no coupons, so why the lower price? It's the latest trend: putting a price on loyalty.

Mary Tucker shops at the same grocery store all the time because she says the people are friendly and they have a great loyalty card program. That loyalty, and the fact that she spends a lot, gets Mary some pretty hefty discounts, discounts other shoppers may not be getting. So what's the deal?

Gary Hawkins is not only a grocery store owner, he's an industry consultant who praises the benefits of "customer specific pricing." That's when a store prices items or gives rewards according to how much you spend. "It may be special prices; it may be special discounts; it may be services or privileges." Stores track your spending habits every time you swipe your loyalty card.

Customer specific pricing is so new, no one knows how many stores are doing it, but Hawkins says it's a growing trend. "You would think that the discounts would be almost targeted for the people who need them; instead what we're seeing is the exact opposite."

The supermarket watchdog group "Caspian" is angry. The group's Katherine Albert says people who shop at the same store every week, but don't ring up big totals, may no longer get discounts. "Since the cards have gone into place, the vast majority of people who qualified for discounts in the past no longer qualify for those discounts."

With two kids and a husband, Priscella Chaves stretches her food budget by shopping around, using a loyalty card and clipping coupons. She's shocked over the new trend. "I will be paying more because I don't spend a lot in one store,  wow!"