Experts are warning Woolworths Everyday Rewards customers that points-based systems often stop customers from shopping around for the best price.
Such loyalty programs award points for purchases at participating stores and their partners.
Everyday Rewards points can be collected at Woolworths, Metro, BWS, BIG W, Bupa, HealthyLife, MyDeal, MILKRUN, Everyday Market, and Origin Energy among others.
Stream The Morning Show free on 7plus
Once an Everyday Rewards member has collected 2000 points, they can choose to save $10 off a shop or convert their points to 1000 Qantas points.
This week, the Australian Competition and Consumer Commission’s interim report on its Digital Platform Services Inquiry slammed the element of data collection associated with such programs.
On Wednesday, Seven Network finance editor Gemma Acton spoke on The Morning Show about the downsides of points programs such as Everyday Rewards.
“Seven out of 10 Australians belong to two of the country’s biggest rewards programs — you have to spend roughly $2,000 to get $10 off your grocery shop,” Acton said.
“On the one hand, you do get stuff. On the other hand, we do tend to overspend.
“If we get sent an email saying, ‘I think you’d love this special shampoo we picked out for you’, you’re more likely to buy it when you may not have before — it stops you shopping around.”
Acton used a carton of milk to illustrate her point.
“You might think, ‘I need to pop in and get milk.’
“Aldi, for example, might sell milk cheaper but you want to collect Woolworths points so you pop into Woolworths to buy it — so you’re not looking for the best price.”
Speaking to 7NEWS.com.au on Wednesday, Woolworths said if used effectively, the program was a massive saver.
“Every month, more than one million members enjoy $10 or more off their shop and last year, members who banked their points for Christmas saved on average $100 to spend over the festive period,” a spokeswoman said.
“We have also launched a subscription service, Everyday Extra, which can save our members up to $100 a month across Woolworths and BIG W.
“As well as 10 percent off their shop once a month at Woolworths and BIG W, Everyday Extra subscribers collect two times points on every transaction, helping them earn rewards points at a faster rate, leading to more savings at the checkout.”
Acton said rewards programs also have often meant customers are giving away their personal information.
“I think most people know when we buy something (shops) collect the information, store it and build a profile on us,” she said.
“But these programs have lots of partners. So, you might think, ‘It’s fine, I don’t mind if my supermarket knows what I buy in my weekly grocery shop’ but they’re giving the information to insurance companies, credit card providers.
“The shared data means they can build up an accurate profile of you.”
Referring to the ACCC’s latest report, Acton echoed her concern about data collection and privacy.
“The ACCC consumer watchdog told us yesterday the average privacy policy we get these days takes 29 minutes to read, and that’s just reading without stopping to understand it,” she said.
“They said if you were to read every privacy policy you come across in a month, it would take two full days and two full nights to get through.”
Woolworths’ Everyday Rewards reply:
“We find that being able to provide more relevant offers leads to a better experience and additional value back for members shopping across our businesses.
“Our suppliers can in turn utilise the aggregated insights we provide to them to consider how they can tailor their contributions to the various promotions that Everyday Rewards offers to its members, to help provide the most value to our members.”