The Tesco Clubcard crisis

by John Fitzsimons on 08 December 2010  |  39 comments
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A scheme launched by supermarket giant Tesco to reward loyal customers has descended into chaos.

Tesco’s voucher exchange programme, a scheme designed to offer loyal customers an even better return on their spending, has instead left thousands of customers fuming. Where did it all go wrong?

The Tesco Big Christmas Exchange

Back in November, Tesco announced it was launching a Big Clubcard Voucher Exchange. Lasting four weeks, it gave collectors of Clubcard points (like me) the opportunity to double the value of their vouchers on a large range of non-food items, ranging from wine and computers to Christmas decorations.

A similar scheme was launched earlier in the year. However, Tesco trumpeted the fact that this time the scheme had been revamped, so now customers would be able to exchange their vouchers online.

Where it went wrong

The scheme was launched around the time that most customers received their November points statement. If you wanted to double up your vouchers, the closing date was Sunday 5 December - last weekend.

Clearly Tesco expected the bulk of interested shoppers to take part once they got their statement through, rather than leave it to the last minute. This was very much a mistake, as news reports and internet message boards are awash with tales of shoppers facing enormous queues to exchange their vouchers, only to give up and try and do it online. With predictable results, the Tesco website collapsed under the weight of so many users.

The supermarket giant has admitted that the huge rush meant that many customers had been unable to exchange their vouchers, and so had missed out on the deal.

What happens next?

Tesco has said its customer services department will be dealing with those customers who have missed out, but it’s unclear whether that means they will have their vouchers doubled. If you were one of the unfortunate ones to miss out, then give the Clubcard customer services number a call on 0800 591688.

What is clear is that there’s a great chance of Tesco repeating such an offer in the coming months. Such schemes are big money spinners for supermarkets, and if there’s one thing Tesco is good at currently, it’s making money – its profits are up 8.8% in Q3, while it’s also upped its market share, something the supermarket itself has attributed in part to its various Clubcard promotions.

We can only expect the supermarket giant to continue to push the benefits of collecting Clubcard points, despite this latest hiccup. And so long as you act fast when such promotions do arise, and don’t leave it to the last minute, you should be ok.

But are Clubcard points worth it? And how do you collect enough to make it worthwhile?

Diminishing returns

It’s worth noting that the returns on Clubcard points actually decreased this week. Previously, if you converted your points into vouchers for things like days out, you could get up to four times the value of your Clubcard vouchers. So if you had £10 worth of Clubcard vouchers, that could be converted into a £40 voucher to use at somewhere like Alton Towers, a cracking deal.

However, since Monday, that has been changed to a maximum of three times the value of your Clubcard voucher – still a decent deal, in fairness, but by no means an insignificant reduction.

More than a supermarket

The obvious way to collect a stack of Clubcard points is to do your shopping in your local Tesco. Given that I live in the town where Tesco has its headquarters, and have one of the largest stores in the country just down the road, that’s not exactly a test for me.

However, big supermarkets offer far more than just food and clothes these days. For example, Tesco has branched out into mobile phones now. Whether you’re on pay as you go or monthly tariffs, you get triple Clubcard points for every £1 you spend with Tesco on your tariff, while if you buy the phone there too, you’ll enjoy double points.

What about other gadgets? Snap up a new iPod touch or classic and you’ll get a boost of 2500 extra Clubcard points. Tesco has even moved into the world of glasses and contact lenses with Tesco Opticians, offering you yet another opportunity to boost your Clubcard tally.

Use your supermarket for more than just your food and you’ll soon see a decent return.

Spending with Tesco

However, the method I use to boost my own Clubcard collection is to put all of my spending on the Tesco Clubcard credit card. It’s a market-leading card in its own right, offering an extraordinary 13 months free of interest on purchases, making it a cracking option if you know you’ve got a large spend coming up and need to spread the payments.

However, it’s also a tremendous option for building up your Clubcard points, even when you’re spending money somewhere other than Tesco. You’ll get one point for every £4 you spend anywhere in the world, but since your card doubles as a Clubcard, you’ll get that point plus standard points for any money you spend in Tesco itself!

For more on the card, and why credit cards generally are improving, have a read of There’s never been a better time to get a credit card.

Everyone is at it

Of course it’s not just Tesco that has expanded into every possible niche, and offers regular customers a reward on their loyalty. Everyone from Asda to Sainsbury’s has moved into some form of financial services, whether it’s credit cards, savings accounts or life insurance. Even Boots has recently launched its own rewards card, which you can read about in A new way to earn rewards on your spending.

If you spend a lot of your time and money shopping in a single store, then it can work out worthwhile to sign up and make the most of the reward points. However, make sure you do your research first. There’s no point signing up to a credit card or insurance policy that is pretty rubbish, simply for the sake of extra points, when you could get a more competitive deal which would end up saving you more cash in the long run.

Similarly, don’t buy something in a supermarket just because it boasts a large points reward – buy what you need, and the points are a bonus!

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