From Tesco Clubcard to Nectar, almost every Saga customer uses a loyalty card. But do they really save us money – and what are retailers getting in return?
Saga customers still like a deal: 98% have a loyalty card
First there were Green Shield stamps – lick and stick enough and you could eventually claim a new toaster (if you filled 155 books, you’d be in line for a Lambretta scooter). Now we have Tesco Clubcard, Nectar and the rest, where the height of excitement might be £1 off your butter.
While that may not be as thrilling, Saga customers still like a deal: 98% have a loyalty card. Half (53%) have 3-5 cards and 31% have more than six. And women have more cards than men.
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"Loyalty schemes have surged in popularity ever since retailers started offering two-tier pricing, and savings can be significant," says Reena Sewraz, retail editor at Which?
In Which?’s latest report, Tesco shoppers with a Clubcard paid £77.90 less for a basket of 220 branded goods than those with no card, who paid £20.58 more than Waitrose shoppers. But cards aren’t everything: the winner of that survey was Asda, which doesn’t have a conventional card. And Aldi (no card) is regularly named cheapest supermarket.
Many suspect that 'normal' prices are inflated so that the card-only deals look better. Is this true? When Which? investigated in 2024, it found a few instances. However, when the Competition and Markets Authority examined 50,000 grocery products later that year, it found little evidence.
But cards do encourage us to spend more – after Clubcard launched in 1995 (the first UK scheme since Green Shield Stamps ended in 1991), shoppers spent 28% more in Tesco.
Saga customers are a sensible bunch, though: only 14% occasionally bought something they didn’t need or later regretted due to a loyalty card deal.
What do retailers get out of it? Data, says Kate Hardcastle, author of The Science of Shopping and adviser to brands on customer behaviour. "I don’t think consumers realise how much data they are handing over, how much tracking there is," she explains.
"Online stores track your every click, every backwards and forwards step you take, every moment spent perusing brands, what you buy together, when you’re beginning to drift away. The loyalty card makes it all make sense as they know details like where you live, how much your house is worth and how old you are."
She notes that tracking systems in stores are advancing rapidly too, and the next wave of camera technology will recognise your emotion when you pull a face while looking at a product. One in five Saga customers really love their cards and put a lot of effort into maximising benefits.
But a third (34%) find them confusing and admit they probably don’t get all the benefits, and a quarter say they often forget to redeem/ spend their points. That’s why for most, "the best cards offer immediate cash rewards," says marketing lecturer Professor Benedetta Crisafulli, of Birkbeck University, London.
Some have become complicated, Hardcastle admits. "We’ve spent years adding sophistication to loyalty programmes: points, personalised offers, vouchers, apps, expiry dates.
"Sometimes we’ve forgotten that the customer is at the checkout trying to remember whether they were supposed to scan, swipe, activate or open an app."
Both she and Prof Crisafulli view most as discount schemes rather than true loyalty cards.
What creates real loyalty to a brand? How they deal with things going wrong, says Hardcastle. "Some of the best loyalty is earned that way. Your survey reveals that almost everyone has joined the loyalty economy.
"The next battle for retailers isn’t getting another card into our wallets, it’s giving us a reason to care which one we reach for first."
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