Whether you are buying clothes, garden furniture or groceries this summer, it is hard to avoid getting caught up in the loyalty card fever sweeping the high street. Do you want to pay the “member price” of £15.99 for some on-trend denim Bermuda shorts (or “jorts”) at H&M, or stump up £21.99? Planning a patio refresh? Ikea’s Nämmarö dining set features a table and six chairs, and is billed as “everything you need for chill moments, long dinners and cheerful summer parties”. But will you pay £372 – the price if you are a member of the “Ikea Family” club – or the “regular price” of £465? Those “chill moments”, of course, require an Aperol spritz. Better head to Sainsbury’s, where, if you are signed up to Nectar, a litre bottle is a snip at £13, compared with the standard price of £22. It all started in earnest back in 2019 with Tesco’s Clubcard prices, but now loyalty pricing is everywhere, with Sainsbury’s, the Co-op, Boots, Ikea and H&M among the big names offering discounted member prices. The proliferation of schemes dangling discounts in front of us has gradually lured in the sceptical, with 80% of consumers now signed up to one, according to Mintel. The market researcher says close to 60% of us subscribe to four or more schemes, while nearly 20% have signed up to eight or more. For the latter group, if they were carrying physical cards, it would be hard to find a wallet or purse big enough. So what is going on, and is this “loyalty gold rush” delivering for consumers? “The great quote is: if you want loyalty, get a dog,” says Catherine Shuttleworth, the chief executive of Savvy Marketing. “None of us are loyal, are we? Now we don’t have to shuffle loads of plastic cards and can stick it all on our phones, it makes no difference.” With money tight, shoppers are less interested in saving their points for a rainy day and want “instant gratification”, whether it is on groceries, clothing or makeup, says Nick Carroll, Mintel’s director of retail insights. “Rather than building up points to redeem at some stage in the future, it has become about the deals or promotions you’re getting at the checkout,” he says. “Within our data, we can see that the majority think that is a change for the better. They want that instant gratification.” Because most schemes are free and easy to join, shoppers see them as interchangeable, with nearly half of consumers telling Mintel they offer more or less the “same” benefits. “It’s something UK shoppers engage with because it saves them money,” says Carroll. “There is real money going into these schemes from the retailers.” While in the groceries sector loyalty schemes have become more transactional, for fashion and homeware retailers they still operate in a more traditional way – rewarding the shoppers who spend more. The H&M member programme, for example, sees customers earn one point for every £1 spent, as well as allowing access to special member prices and discounts. “In fashion, you see more of the advantage to being in a loyalty scheme – you have early access to sales, things like preferential delivery and returns, so it is more of an overall membership scheme rather than simply being a loyalty discount,” says Carroll. The rise of loyalty pricing in supermarkets – a new spin on store promotions – means it now no longer makes sense to shop at Tesco or Sainsbury’s without a Clubcard or Nectar card, as that would mean missing out on all the best deals. At the same time, some critics – including the consumer champion Which? – have questioned whether the deals are as good as they look. Ele Clark, Which?’s retail editor, says some schemes can offer decent savings. “It may be worth signing up to schemes offered by shops you already use, provided you’re comfortable with giving retailers access to your personal data in return.” But she adds that shoppers “may want to take the size of the discount with a pinch of salt”, as Which? research conducted last summer suggested that up to a third of loyalty offers at Sainsbury’s and Tesco “weren’t all they were cracked up to be”. “As member-only pricing continues to grow, the sector, its pricing practices and membership eligibility need to be properly scrutinised so that all shoppers – including society’s most vulnerable – can benefit, and no one is misled into thinking that offers are better than they really are,” says Clark. Even within the industry, not everyone is a fan. Last month, Stuart Machin, the chief executive of Marks & Spencer, said: “We don’t do tricksy pricing at M&S.” He told City investors: “What I don’t want to get into is tricksy prices where, if you’re in [M&S’s reward scheme] Sparks, you get something for a better price just for that day or for that one week, and we’re forcing you to buy something you might not even want.” In this context, all eyes are on the Competition and Markets Authority (CMA), which is due to provide an update on loyalty pricing next month. It has been looking at several areas, including whether the tactic could mislead – for instance, is the discounted price a genuine promotion or as good a deal as presented? With about 8,000 Clubcard price offers current at any one time, Tesco says its loyalty deals can save customers up to £360 a year. With 7,000 Nectar deals, the Sainsbury’s pitch is that customers save on average £12 on an £80 shop. Both companies say the promotions follow strict rules informed by guidance from Trading Standards. Of course, there is no such thing as a free (meal deal) lunch. “Consumers understand it is a bit of a quid pro quo,” says Kien Tan, a senior retail adviser at PwC. “You are giving retailers your data and, in return, you get discounts and special offers.” This data is anonymised by supermarkets and used to build profiles of types of customers that can give other businesses an idea of what a typical person might be interested in buying. Some estimates suggest that Tesco and Sainsbury’s alone are making £300m a year from selling their in-house data. The vogue for discounted prices means “it is a good time to be alive if you are shopper”, says Shuttleworth. “Over time, we’ll get bored of it, but the cost of living crisis means you want the best possible prices.” This short attention span perhaps explains why Tesco and Sainsbury’s are turning to gamification, in the form of personalised offers and competitions, to keep shoppers coming back. Tesco, for example, is testing new AI-powered “Clubcard challenges”. It invited 3 million of its 22 million cardholders to take part in a promotion requiring them to make use of 10 personalised offers to bank up to £50 in points. Meanwhile, Sainsbury’s is running what it says is a “first-of-its-kind” Nectar competition with Diet Coke. This combines a price cut (a 24-can pack is down £4 at £6.75) with a treasure hunt. There are 100 “Nectar Purple” cans hidden in the packs, with the finders scooping £100 worth of points. As retailers try to outdo each other with loyalty pricing, Shuttleworth says it is vital that they do not lose shoppers’ trust. “Shoppers are smart and, because they can just check the price on their phone, you can’t pull the wool over their eyes. It’s got to be transparent and clear.” Deal or no deal? How prices compare Aperol Aperitivo 1l Tesco £21, Clubcard price £17 Sainsbury’s £22, Nectar price £13 Asda £17, reduced from £21 Morrisons £17 Pilgrims Choice mature cheddar cheese 350g Tesco £4.20 Sainsbury’s £4.20, Nectar £2.75 Asda £3 Morrisons £3 Finish Ultimate All in One regular dishwasher tablets x55 Tesco £11.25, Clubcard £9 Sainsburys £13.80, Nectar £10 Asda £11.50 Morrisons £10, reduced from £12 Huggies Pull-Ups boys’ night-time nappy pants age 2-4 years, size 6, 15-23kg x18 Tesco £4 (Low Everyday Price) Sainsbury’s £7, Nectar £3.95 Asda £8 (50% off) Morrisons £4 Anchor Spreadable blend of butter and rapeseed oil 400g Tesco £3.60 Sainsbury’s £3.35, Nectar £2.75 Asda £3.35 Morrisons £3.60 Napolina olive oil 500ml Tesco £7.95, Clubcard £6.85 Sainsbury’s £7.95 Asda £6.85, reduced from £7.95 Morrisons £7.95