This week, Tesco has announced plans to significantly alter the value of your Clubcard Reward Points. Starting in June, Tesco Clubcard points will only be worth twice their value when redeemed for rewards outside of Tesco purchases. This is a significant decrease, as spending your Tesco Clubcard points on rewards will give you three times the monetary value.
How do Tesco Clubcard Rewards work?
The Tesco Clubcard scheme is one of the most popular loyalty schemes in the UK, allowing customers to earn points when they shop in-store and online at Tesco. Earning points means you will generate money-off vouchers that can be used in-store; however, you can also exchange your Tesco Clubcard points for rewards vouchers. These can be used on excursions, such as day trips, restaurants or in other stores.
This announcement from Tesco to reduce the value of the Clubcard rewards follows both Sainsbury’s and Boots, who have also cut their own loyalty schemes. Disappointingly, some Tesco customers have expressed extreme disappointment at the decision to reduce the value of Tesco Clubcard rewards and have taken to the internet to share their views. A vocal few have said the only reason they chose Tesco was to save the rewards for events and purchases across the year. Others mentioned that they rarely received any Tesco Clubcard vouchers and that they would probably look to shop elsewhere because of the changes. Resoundingly, the response to the change has been negative. However, many people don’t truly understand the difference. It is disappointing that another loyalty scheme has seen its reward value decrease significantly in 2023.
What does Tesco have to say about the club card value reduction?
Tesco’s Chief Customer Officer, Alessandra Bellini, explained that the decision was made to ensure that the company can continue to offer a wide range of rewards while keeping product prices low. She also mentioned that Tesco would extend the validity period for Clubcard rewards to 12 months, up from the current six months, allowing customers to redeem points at a higher value before the changes take effect.
The Changing Landscape of Retail Loyalty Schemes
Tesco first launched the Clubcard in 1995, and it is reported that its introduction alone helped increase customer spending in its stores by nearly 30%. Whenever you spend money in-store or online, you accrue points and these points turn into pounds. However, if you choose to convert these vouchers from a monetary value to use in-store, you can multiply them to use as rewards in restaurants or entertainment venues across the UK. Some of the partners in the Tesco Clubcard rewards include Pizza Express, LEGOLAND and Alton Towers.
Other national retailers, including Boots and Sainsbury’s, have also recently reduced the value of their reward schemes. The Boots Advantage Card will see a 25% reduction in value from May onwards, where every pound spent in-store will now only earn 3p instead of 4p. The change in the Boots Advantage Card scheme came with an assertion from Boots that customers want instant discounts on their shops, as opposed to saving their points for large purchases in the future. Both Boots and Tesco aim to reduce the cost of purchasing items in their stores by offering own-brand products at lower costs to customers but with higher profit margins for themselves.
Final thoughts
There definitely feels like a level of cost-cutting happening with the UK retailers and Tesco is the latest of them to reduce the value of their loyalty scheme. However, the level of data and understanding supermarkets like Tesco and Asda have of their customers define their decisions.
We don’t have to like it, but if we want to continue saving our Tesco Clubcard vouchers and using these for rewards, we only have one option.
Alternatively, you may choose to shop at another supermarket. If you do, then check out the Asda Rewards App. They are running a huge campaign where you make cash not points for your purchases. Sainsbury’s has also recently launched its Nectar Prices loyalty scheme, which promises currently unmatched discounts for it’s members.
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