Are you ready for Christmas? The stores are getting ready. You're probably in a loyalty program or two, but are they worth it?
Black Friday-style sales have already started with supply chain issues top of mind. Best Buy is one company pointing out, product shortages and shipping delays as part of its new annual membership program.
It's giving members access to hard to find holiday items throughout the holiday season, and special prices starting soon. You can expect to see more loyalty programs like this. A recent survey found 55% of companies say they will have loyalty-specific marketing events during the holiday shopping season.
According to KPMG Globals Julia Wilson, she says, "What draws consumers the strongest motivating promotional activity are what we call vary price reductions. That can be a percentage discount or a dollar discount and that's still the strongest draw that we're seeing. Loyalty programs are also a core component to that marketing mix."
The big question is, are these loyalty programs with it? Best Buy's for example, includes an extended 60 day return policy with the two hundred yearly fee you pay. Wilson adds, "When we think about what a consumer is looking for, they're definitely looking at the benefit to them versus the kind of the barrier to entry, so to speak, so whether it's a nuisance of filling out a form or paying a fee."
Ted Rossman, Senior Industry Analyst for creditcards.com says, "I would say, though, that you need to be a loyalist to make it worth it. I would also urge people to consider what might already exist in other formats. For example, a lot of credit cards will give you an extended warranty for free just by using the right card."
That means you need to plan to buy multiple items from that company in the next year to potentially make a membership worth it. Rossman adds, "For more it may actually make more sense to either go through a credit card warranty or even pay out of pocket, sometimes for a service plan."
