In today’s overcrowded market, stores are not only focused on how to bring new customers in but also on how to keep the shoppers they already have. Customer retention is a critical component of a company’s sustainability. One way retailers are hoping to do this is through store loyalty programs.
Here It Is: Our 2022 Small Business Spotlight
Small Business Spotlight 2022: GOBankingRates Celebrates Small Businesses Across the US
Store loyalty programs have been around for decades. While each one varies slightly in how it works, the overall premise is that the more you shop, the more rewards you will receive. Loyalty programs can be a great way to save money; but, in order to really reap the benefits, you need to be selective about which ones you choose.
Many of the most popular loyalty programs offer free gifts. Depending on the company, you may receive a free reward just for signing up or get a birthday gift. For instance, Target Circle sends you 5% off a single purchase for your birthday. Old Navy offers Navyist members quarterly and yearly bonus points for making any purchases at their family of brands. Joining Sephora’s free Beauty Insider program will get you a free birthday gift or 250 bonus points.
Take Our Poll: Do You Tip for Service?
While many store loyalty programs are free, some will cost you an annual membership fee. It is essential to do a cost-benefit analysis before shelling out money to join a loyalty program. If you never shop there, paying $25 or more to get a free birthday gift is probably not worth it.
Another big sell for customers is the coupons that loyalty programs offer their members. You can stack up the savings from grocery stores to pharmacies by signing up for free memberships. Many retailers have apps that send digital coupons right to your account.
Kroger shoppers are often delighted to find coupons tailored to their previous purchases. The more you shop, the better the coupons get, including offers for free products and money off your first pickup or delivery order. It is important to remember that most loyalty programs reward you for your loyalty. If you don’t frequent the store very often, you might not be getting the most significant savings.
Cash is king, and retailers know it. Many have started offering cash-back incentives for customers who spend big. In some cases, like at Kroger, you receive cash back for purchasing certain items. The only downside is that it may entice you to buy things you really don’t need or wouldn’t normally purchase if you weren’t receiving cash back. Be careful not to end up spending more just to get a few dollars back.
Other programs offer cash back based on the amount you spend at their store. Often the largest cashback incentive programs are tied to credit cards; so, again, you need to be conscious of what you are spending and how you are spending it. Paying interest on something may defeat the advantage of receiving cash-back rewards.
Store credit is by far one of the most popular benefits of loyalty programs. From CVS ExtraCare to My Best Buy, each gives you credit or in-store cash to use on future purchases. The savings can add up quickly if you are a loyal customer. Kohl’s Rewards is a fan favorite loyalty program offering 5% rewards on every purchase. As you spend, you’ll earn Kohl’s cash in $5 increments to be used on future purchases.
One of the few drawbacks to store credit rewards is that they often have expiration dates. Use it or lose it. So, as you receive these incentives, you need to plan a shopping trip (just as the retailer had hoped).
Amazon Prime may have made it famous, but other big-box retailers are making it commonplace. Nearly every store loyalty program now offers some form of free shipping. Sometimes, it may simply be free standard shipping on orders over a certain amount; in others, members receive free two-day or expedited shipping. Either way, you can’t beat the price.
Companies are always looking for some way to distinguish themselves from the competition. Knowing that consumers want more, many stores are now offering exclusive access to discounts and deals as a part of their loyalty programs.
At a grocer, you may find that prices are slightly lower for members compared to non-members. At an electronics store, you may receive first dibs on new music or the latest video game. At a beauty retailer, you may get early access to the newest celebrity product or receive an exclusive discount on this season’s must-have lip liner.
For instance, Ulta offers diamond members (those who spend $1,000 or more per year) of their Ultamate Rewards program all of the above, including exclusive deals, gifts and early access, as well as a diamond gift.
Happy shopping — and remember: The more you spend, the more you save. Choose your loyalties wisely.
More From GOBankingRates