Walgreens
‘ new loyalty program is off to a strong start. But, so far at least, few people who have signed up are taking full advantage of the program.
Since its launch in September (read: “Walgreens’ ‘Balance Rewards’ Begins”), more than 45 million people have signed up to participate in Balance Rewards. It took a year and a half for rival Rite Aid to reach that milestone when it launched its wellness+ loyalty program in 2010. “We’re extremely pleased with our progress,” Walgreens CEO Gregory Wasson said Friday.
But of those 45 million participants, only 2.5 million – or about 5% – have actually redeemed points so far. The program gives you cash off future purchases, when you gather enough points (read a Balance Rewards fact sheet here: “Walgreens’ ‘Balance Rewards’ Signup Begins”). The system, in store and online, is designed to prompt customers when they’ve earned enough points to redeem a reward. So, unless 42.5 million customers are declining to accept their rewards, which seems unlikely, or they’re banking them, the numbers suggest that most Balance Rewards members haven’t actually accumulated enough points to earn anything at all.
But Balance Rewards isn’t just about earning points. You need to be a member in order to take advantage of sale prices. Not a member? Be prepared to pay full price for everything. Many Balance Rewards members, then, may have signed up at checkout just to avoid paying full price, and haven’t bothered with gathering points. And despite surveys that Walgreens says indicate its customers are “delighted with the simplicity of the program,” some disgruntled shoppers have simply opted out of Walgreens altogether – uninterested in having to sign up for yet another loyalty program.
Walgreens is now trying to encourage Balance Rewards members to redeem points – by offering more points to those who do. Ordinarily, you don’t earn any points on a transaction if you pay with points. But from December 26th through the 29th, you can earn 2,500 additional points if you redeem at least 10,000 points in store or online. Redeeming 10,000 points gets you $10 off your purchase; earning 2,500 points puts you halfway to a $5 off reward.
“Where the real magic starts to happen is when we start to build the redemption,” Wasson said Friday. “We’re just now starting to reach that point where those numbers are starting to grow.”
Still, Walgreens has a ways to go to catch up with the industry leader in loyalty. “With over 275 million cards issued,” CVS executive Mark Cosby boasted recently, “our loyalty program is six times the size of our next closest pharmacy competitor.” Then again, only about 70 million of CVS ExtraCare cardholders are considered “active members” – a number that Walgreens is already closing in on. (Read more about the drug store loyalty programs here: “Drug Stores Duel For Your Devotion”)
Ohio resident Michael Brace is one shopper who’s sticking with Walgreens. He was one of ten winners of a Walgreens contest, earning a million Balance Rewards points just for signing up for the program. “I was pretty much speechless,” he told the Gallipolis Daily Tribune in October. A million points, redeemed 40,000 points at a time, is enough for $1,250 in free merchandise. And during the current promotion, a million points redeemed 10,000 points at a time will earn 250,000 additional points – enough for $6,250 in additional free stuff. “The wife and kids will probably enjoy all the makeup and other perks that we can get there with this,” Brace said.
As Walgreens works to build loyalty, chalk up at least one Ohio family as remaining loyal for a long time to come.
This is a complete scam. The program is completely misleading and forces people to sign up unless you want to pay full “Walgreens” prices for everything, and if you have ever shopped at Walgreens you know their full prices are ridiculous. I recently visited Walgreens, unaware of this new program and saw lots of big sale price tags on items. The tags looked like normal Walgreens’ sale tags. When I got to the register the items rang up at full price. Appearantly the sales tags have some fine print that say balance reward’s members only. The cashier was rude about the incident and blamed me for not reading the fine print on the huge sale price tag. When I left the store I realized I had overpayed for multiple items that I thought were on sale. This is very unethical business as I can only imagine how many people have overpaid for items and not even realized it. The cashier didn’t say a word to me about it and would have just let me go with paying almost double for the products. I bought nasal spray that was listed as $4.99 but was actually $9.39 for non-members. It’s sickening that they charge $9.39 to non-members but can still make a profit at $4.99. The worst part is that the generic brand was $6.49 and the generic brand of the same product at Walmart is under $2.00.
Thanks for the comment – and you’ve hit the nail on the head. The down side of (most) loyalty programs is that aside from the points and the perks and the coupons and whatever else they might offer that you may or may not be interested in, you need to be a member just to get most of the sale prices. As one person said, quoted in this article:
https://couponsinthenews.com/2012/09/21/down-with-loyalty-cards-another-view/
“If you just dash into some random place [without a loyalty card], there’s a good chance you’re going to get robbed.”
This gives Walgreens the best of both worlds: they get to advertise low prices, but they know many people will actually end up paying full price. So they benefit if you sign up for their card – and they benefit if you don’t.
Walgreens new loyalty program is a flop. I was a loyal Walgreens shopper but have opted more for CVS these days. With CVS I can earn extra care bucks when I use them (unlike Walgreens where I can’t earn points when I use them), I can use as many ECB as I want/need on a transaction whereas Walgreens makes me have the correct item/coupon ratio. Their program is much too confusing for the average shopper and they need to seriously rethink it.
Thanks for your thoughts, Suzie – the fact that so few people have redeemed rewards could indeed indicate that it’s just too confusing for the average shopper. Does anyone who runs into Walgreens to grab a few things really pay attention to which items offer how many points, and keep close tabs on their balance to know when they have a reward to redeem? I suspect many people feel backed into a corner, having to sign up for the card just to get the sale prices, as Tyler mentions above, without caring about “points” whatsoever.
It may be impressive to say they have millions of members – but if those members aren’t engaged, that’s much more telling.
Not sure it’s fair to judge engagement by redemption less than 3 months after the program begins. It takes some time to accumulate enough points for rewards. I for one, like to wait until I have enough rewards for something meaningful rather than 5 bucks off my bill. I suspect I’m not alone.
Fair point – it is early yet, too soon to say what the long-term trend will be. Hoping to get an update from Walgreens, meanwhile, on whether the earn-points-by-spending-points promotion helped to move the needle at all.
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