Retailer loyalty card discounts do not always offer shoppers genuine savings, a new Which? study has revealed, as the consumer champion called for action to tackle the “murky and confusing” pricing practices.
Which? investigated the prices of nearly 12,000 products across Boots, Co-op, Morrisons, Sainsbury’s, Superdrug and Tesco, and exposed some “very questionable non-member prices” and some deals it branded “an outright rip-off”.
Some products were found to be continuously kept on promotion, and others never returned to their non-member price when their offer ended.
In one of its “worst examples,” Which? found that Boots put an Oral B iO7 electric toothbrush on sale with the offer “Non-members £400, members £150”, however, the product had only been £400 for 13 days before and had otherwise been £150 for all shoppers.
It also found that Birds Eye Chicken Nuggets at Sainsbury’s that costed non-members £5.50 and members £4 had been on sale for £5.50 for just three weeks before the loyalty offer launched, and were £5 for everyone before that.
In response to the research, Boots said all of its promotions, including its Price Advantage, “were assessed against applicable laws and guidelines set out by the Chartered Trading Standards Institute”.
Sainsbury’s also insisted that customers “understood that factors like inflation, seasonality and promotions could affect prices” and added that it followed pricing guidance for the industry.
Meanwhile, Which? reported that 10% of the products it examined at Tesco had been at their non-member price for less than half the time, while the same had applied to 5% at Sainsbury’s and 3% at Co-op.
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The consumer champion believes the findings show that the guidance on how consumer law applies to pricing promotions needs to be updated to clarify how it applies to loyalty pricing.
Which? retail editor Ele Clark 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. But while the discounts can look impressive, many shoppers are growing suspicious of non-member prices that seem high.
“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.
“Guidance on pricing laws needs to be updated to include loyalty pricing, to help regulators crack down if businesses break the rules. The CMA should continue to monitor loyalty pricing practices across key consumer sectors and be ready to use its new powers to take action against retailers that don’t comply.”
Despite the findings, Which? said membership schemes did help shoppers make savings on average, with the average savings on goods at Superdrug hitting 33%, 25% at Morrisons, 24% at Sainsbury’s, 23% at Tesco and 10% at Boots.
The study comes after the Competition and Markets Authority (CMA) found that UK supermarket loyalty schemes were not likely to be misleading shoppers over loyalty pricing last month.
The watchdog, which began a probe of supermarket pricing in January, said in an update that while its investigation was ongoing, there was a lack of evidence to suggest that promotions were unfair.
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