Loyalty has its costs
If you are like me, you have certain stores that you go back to time after time. Maybe because the store or chain carries exactly what you are always looking for, or maybe you have a rewards card that earns you discounts or free stuff over time. Well it turns out that what is free for some, is made up for by costing others.
A report by the Federal Reserve Bank of Boston says stores with loyalty card programs often raise their prices to cover the discounts and free gifts, costing those without cards, an extra $23 a year to shop, while those "preferred" customers get an average of $756 in rewards. Those without cards, tend to be the less affluent customers, while the richer consumers reap the rewards.
But if you are a business, building a customer loyalty program can reap big rewards in sales and can contribute to the bottom line. Check out these books on the business side of customer loyalty programs, available at the Toronto Public Library:
Will you reap the rewards?
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