Supermarkets accused of ‘dubious discounts’ on loyalty cards

Big supermarket giants are under fire over their “murky and confusing” loyalty card schemes with allegations that many of the discounts are “misleading” or “an outright rip-off”.

The consumer group Which? analysed the pricing history of almost 12,000 products at health and beauty retailers and supermarkets to see how many times the non-member prices on items with loyalty discounts had been in place during the previous six months.

In most cases, Which? found that some of those products were on a different kind of promotion immediately before the loyalty discount was launched, raising “questions about the tactics at play” and whether the non-member prices used to highlight the “supposed savings” were genuine.

Which?, in its analysis, found that 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 per cent.

Like, it was found that at Ambre Solaire Ultra-Hydrating Sun Cream Spray was £6 with a Clubcard or £8 without. It had been £8 for only 14 days in the previous six months. Before that it was £6 for everyone. At Sainsbury’s, Ariel All-in-1 Pods Washing Liquid Capsules 39 Washes were £9.50 for Nectar members and £10.50 for others. Two months earlier they were £9.50 for all.

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.

Which? findings come amid Competition and Markets Authority’s investigation on concerns that loyalty schemes 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.