Consumer group Which? has questioned “murky and confusing” loyalty pricing practices after a survey of supermarket and high street chains.
A Which? investigation of prices of nearly 12,000 products at health and beauty retailers and supermarkets found what it called “dubious discounts” and “concerning” pricing practices at major retailers.
Numbers of retail loyalty programmes, which see customers signing up to access lower prices, personalised rewards and offers, and loyalty points, have proliferated in recent years as retailers compete sharply for consumers cash.
Which? found that as many as one in six (16 per cent) products on a loyalty offer in a major chemist chain had been at the non-member prices for less than half the time. At some major supermarkets it was one in 10.
Its investigators also also identified cases where prices were raised to a higher price for a relatively brief period before going on “offer”.
In one instance an electronic toothbrush was at a non-member price of £400, while the members’ price was £150. This product had only been £400 for 13 days beforehand, prior to which it was £150 for everyone, according to the consumer groups researchers.
In another major High Street retailer Which? found 649 products where the price for non-members was raised on the same day the loyalty promotion began. Some may have been on a different kind of promotion immediately before the loyalty price launched, but the changes “raises questions” about the tactics at play and if the non-member prices used to highlight the supposed savings are genuine.
Which? said the results underlined a pressing need for the clarification of guidelines on how consumer law applies to price promotions for loyalty pricing applied to thousands of products.
Ele Clark, Which? retail editor, said: “Loyalty cards are increasingly big business, with the explosion in two-tier pricing meaning shoppers will often pay a lot more if they aren’t a member of the retailer’s scheme.
“But while the discounts can look impressive, many shoppers are growing suspicious of non-member prices that seem high.
“We looked at the pricing history of thousands of products and found that, while the majority of discounts were not misleading, there were some questionable non-member prices and some examples that looked like an outright rip-off.
She said Which? found some products were always, or almost always, on loyalty promotion, making it difficult to spot a genuine deal.
“Guidance on pricing laws needs to be updated to include loyalty pricing, to help regulators crack down if businesses break the rules.”
The Which? investigation comes as the Competition and Markets Authority (CMA) regulator is carrying out a separate inquiry into whether loyalty scheme prices represent genuine savings. It said its initial findings suggested retailers are unlikely to mislead shoppers. The full CMA report is expected in November.
The CMA should continue to monitor loyalty pricing practices across key consumer sectors and be ready to use its new powers to take action against retailers that don’t comply,” Ele Clark said.
Which? pointed out the Digital Markets, Competition and Consumers Act will also soon give the regulator powers to hit businesses with fines, without going through the courts, to enforce the law.