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It’s easy to save money at Kohl’s! The more cash you spend, the more Kohl’s Cash you earn – though Kohl’s Cash isn’t actually cash, it’s more like a coupon, which can be combined with other coupons, subject to complicated calculations that don’t always result in the discount you might expect, on the reduced prices of items tagged with “regular” prices that Kohl’s never actually charges.

See, totally easy!

A group of activist investors that recently challenged Bed Bath & Beyond’s management and promotional practices is now doing the same to Kohl’s – urging it to make a number of changes, including simplifying its “onslaught of confusing promotional activity.”

The investors, who together own about 9.5% of Kohl’s stock, are attempting to use their leverage to force changes they say would improve the retailer’s financial performance. Kohl’s “has failed to help develop and oversee a strategic plan to respond to a rapidly-changing retail landscape,” the group wrote in a letter to fellow stockholders. So it’s nominating its own candidates for Kohl’s board of directors, and recommending a number of improvements to the way Kohl’s does business.

Among those proposed changes are improvements to Kohl’s current promotional and pricing practices.

“Kohl’s uses a dizzying array of promotional gimmicks that makes it difficult for many customers to know the actual price of an item,” the investors’ letter reads. They’re calling on Kohl’s to “streamline the myriad of different promotions” – not by eliminating deals, but by making them easier to understand. “Eliminate confusion, not discounting, to ensure customer(s) can buy with confidence,” they’re advising.

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Much of the confusion, they say, has to do with Kohl’s ever-changing loyalty programs. The latest iteration, Kohl’s Rewards, was pitched as a “new simplified loyalty program” when it was rolled out to all stores last year. Shoppers earn 5% Kohl’s Cash on every purchase, accumulated over the course of a month. At the beginning of each month, your Kohl’s Cash balance is issued in $5 increments, and must be redeemed before the end of the month.

But the investors group is unimpressed. “Kohl’s has been talking about fixing its loyalty program for years and has made little progress,” their letter reads. “While there have been some recently announced changes to simplify the program, more needs to be done.” The current program, they say, remains “highly confusing” and “nearly impossible to understand for new customers.”

Pricing and promotions aren’t the only things Kohl’s needs to fix, the group says. It’s uninspired by Kohl’s product assortment, its “dated approach to merchandising and marketing that does not resonate in today’s retail landscape,” its app and website that overemphasizes “promotional offers and discounts that users must perpetually scroll past to begin shopping,” and its corporate culture. “Despite suffering from chronic stock price and operating underperformance, the company still maintains a full-time flight crew and two private jets,” the group points out.

For its part, Kohl’s is saying thanks for the advice, but no thanks. “We remain open to new ideas,” the retailer said in a statement. “However, we reject the investor group’s attempt to seize control of our board and disrupt our momentum.” Kohl’s says its “strategic plan already includes several initiatives they propose,” and it is “already making progress.”

The bottom line, the activist investors say, is that Kohl’s generated $18.8 billion in sales in 2011 – and $18.9 billion in 2019, barely budging even eight years later. “The company’s inability to gain market share despite spending approximately $1 billion a year on marketing and hundreds of millions of dollars on e-commerce fulfillment capabilities is highly disappointing,” they conclude.

So when you consider list prices, sale prices, coupons, Kohl’s Cash, loyalty rewards and more, if you’ve ever wondered whether you’re really getting a good deal at Kohl’s, you’re not alone. Investors who have sunk millions into the business want to know whether they’re really getting their money’s worth, too.

Image source: Kohl’s

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