OK, back to our story. When a bonus, guarantee, loyalty or incentive program is built based on how much spoilage or breakage it can create (how many customer WON’T be able to take advantage of it), it is not designed to add true value to the customer. Instead, it offers the appearance of value but has all sorts of trapdoors and obstacles to keep more of their members from actually redeeming the points they earn.
Often this starts with devaluing the actual “currency” of their previous program. In most grocery stores you have a variety of sales and discounts: BOGOs, half off, buy 3 get 1 free, etc. When Winn-Dixie Supermarkets introduced their new program, the average was around $.05 per dollar spent. So for $100 spend you averaged around $5, based on points. So right away, they’ve cut their costs (actually, the balance of their historical average discounts was probably paid to the company servicing their new loyalty program, but in either case, they devalued the actual savings to their customers.)
Next, programs have different ways of counting and applying points, so it’s difficult to figure your actual savings (how their points convert to dollars). In our case, we spend about $400 or so at Winn-Dixie, and their new rewards program gave us a $.55 a gallon gasoline discount (off up to 20 gallons) as our reward. Hey, I’ll drive to a gas station I don’t usually go to with (what amounts to) an $11 gas card, wouldn’t you? So off I headed to the nearest Shell station.
I inserted my brand new Winn-Dixie rewards card in the pump (to tell the system I got the discount), and the card was miss-sized. No, really! In other words, it stuck! So I pried it out and went inside to ask for some scissors (to trim it).
Michelle at the counter was phenomenal. She had scissors ready, because it turns out ALL the new Winn-Dixie cards were sized wrong! It must be hard to get this part right, since every credit card in the universe is exactly the same size! OK, but this is just plain incompetence, not intended to create breakage …or was it!? She trimmed my card and walked outside to make sure it worked OK. It still didn’t. The pump wouldn’t read it. By now an elderly lady had pulled in and was struggling with her card, so Michelle helped her get it out and we three walked back inside, to manually enter the card info. From the other side of the station another Winn-Dixie customer came in, same problem.
Sidenote: Winn-Dixie obviously has a program that customers are embracing…we were all there at Shell to try to use our points. Too bad they seem to be focused on the wrong things… but I’m getting ahead of myself.
In all the confusion poor Michelle plugged in $20 instead of 20 gallons for me, and neither of us noticed (a simple mistake, considering most people who pay inside ask for gas by a dollar amount). When my pump shut off at about half full I realized the mistake, and went back in. But the program only allowed one “fill-up” a month, up to 20 gallons. If you use less — oh well, that’s more breakage which means more bottom line profits for the program! I happen to have a vehicle with a 25 gallon tank, but the majority of vehicles have less than 20 gallon tanks…so even on a perfect day with no problems the company could promote bigger savings than the average customer could ever get! Wait…is that another breakage point?
Michelle tried and tried, but she couldn’t get the system to adjust the amount after the fact. She told me Winn-Dixie had been really good about fixing issues… so I drove around the corner to the store. Nope, they couldn’t do anything about it at the store, I had to call the card customer service department!
Next Post: Passing the Buck
Note: This series of posts is not meant to disparage Winn-Dixie or their parent corporation Southeastern Grocers, their people or their loyalty program or partners in any way. I’m simply relaying my personal experiences, which may be different from their average customer. Also, these represent my personal opinion as to how a well-meaning loyalty-rewards program can go awry, and serve to foster disloyalty and dissatisfaction in the process. I do not have insider information on their program, and I have not attempted to discuss these points with the company other than where indicated. When a program appears to be designed to be difficult for customers to utilize or redeem, and has multiple points where breakage can occur, I believe it’s bigger objectives (to create loyalty and increase sales) have either been intentionally or inadvertently subverted to save money through breakage.
