Tesco Clubcard/Vouchers/Points/Deals - Post All Questions Here

Grabbit_2

Take a look from the perspective of the companies taking the deals.

Imagine a company that is not selling as much as it needs to to satisfy it's owners shareholders and investors. They have fixed overheads and must make a certain level of sales to survive. They will do what they need to do to get the right number of customers coming through their doors and to increase their overall volume of business and profitabiity.
For example

• Nationwide “"In less than twelve months, the Nationwide Autocentre Team have turned around the loss-making 41 centres” 7/2/06
  
• MFI have taken a massive hit on profits due to botched supply chain systems and have had a new CEO in the last few years.
  
• Legoland Lego sold it’s theme parks in July 2005 due to slowing sales and wanting to focus on it’s core toy business

If you worked for that company and were given the opportunity to increase the number of customers by say 20%. Each one of these customers would be clutching a tesco voucher. Cue Tesco with some very acurate demographic data about the number of people within x miles of your stores who have cars / kids / kitchens / days out etc. You would give your right arm to persuade these people to come walking in to your business and not your competitors.
Tesco would charge you access to that list of people and would also drive a really hard bargain on how much they paid you for each voucher because they are the smartest and biggest supermarket in the country. Just look at the prices the farmers get these days having to compete on a global stage. Don’t forget they are really the only people running a points scheme that uses the data they capture and getting vaslue out of it. .

So lets say you said OK I’ll give you 2.50 for every customer who comes through my door. But the voucher says £10. The question is how do you make up the other £7.50
OK your basic product has a fixed cost of the people who do the MOT / supervise the theme park or supply a kitchen. This is NOT the £10 you would usually buy it for. It might be a quarter or a half or two thirds of what you pay for it, but it is certainly not £10. Let say it is a fiver.

For each custoemr who gives you a £10 voucher you could end up with a balance sheet like this
• Tesco pay you £2.50 – you could pay for it from your marketing fund because you now have a customer who will come back next time and will spend even more money with you.
• You make £10.00 on the other £40 of additional goods or services you provide eg

• lunch / souvenirs / ice cream in the case of leisure parks
• additional product not covered by the voucher in the case of MFI type shops
• Tyres and mechanical services in the case of nationwide.

So you end up £7.50 ahead with a customer who might have gone to your competitor.

Tell me that doesn’t stack up.

The point about nectar not being able to give such good deals may well be down to the cost of the nectar scheme being higher to run (due to less volume and less partners giving good deals) and Sainsburys wanting a higher return per head.

So to conclude, Tesco aren’t giving you anything apart from a piece of paper. The fact that it says it is worth £10 to YOU doesn’t mean it costs them or the company you give it to £10.

bb999

koru wrote:

2 If the explanation is that Tesco is willing to spend 4% of its income attracting people to use their clubcard, why wouldn't Tesco spend that same 4% if you spend the points in Tesco's own stores? Why would they wish to make it 3-4 times as attractive to spend your points anywhere but Tesco's own shops?

QUOTE]

If Tesco give 4% in store, then their income drops 4% because we would be using the vouchers on things we would buy anyway.

taxiphil

Grabbit wrote:

For each custoemr who gives you a £10 voucher you could end up with a balance sheet like this
• Tesco pay you £2.50 – you could pay for it from your marketing fund because you now have a customer who will come back next time and will spend even more money with you.
• You make £10.00 on the other £40 of additional goods or services you provide eg

• lunch / souvenirs / ice cream in the case of leisure parks
• additional product not covered by the voucher in the case of MFI type shops
• Tyres and mechanical services in the case of nationwide.

So you end up £7.50 ahead with a customer who might have gone to your competitor.

Tell me that doesn’t stack up.

It doesn't really stack up in my eyes because that theory assumes that most customers are daft and make up the extra 75% themselves through buying peripheral products at the same time, or coming back and spending more at a later date and paying in cash.

I think the majority of customers who use Deals vouchers are extremely thrifty people who won't negate their hard-earned bargain by falling into this trap.

How do you explain, for example, the fact that £74.75 of Clubcard vouchers will buy a £299.00 Hotpoint Aquarius washing machine from MFI. The same machine is selling for the same price in Currys and Comet, so we can't accuse MFI of ramping up their price in order to dampen the benefit of the Tesco Deals vouchers.

Obviously £74.75 is way below cost price for this machine, so who's subsidising this loss? Tesco or MFI?

I've always assumed that Tesco pay the other company (eg. MFI / Cosmos / Nationwide) a figure between 2 and 3 times the face value of the Clubcard points. Hence I think Tesco are bearing most of the brunt of the added value of Deals vouchers.

I share the puzzlement of the OP on this topic. I can only assume the whole scheme is a medium-term plan which is absorbed into Tesco's overall business strategy in order to make their supermarket more attractive than any other. Through their massive volume of sales, they're basically offering a cashback scheme of about 2.5% (perceived to be 4% in the customers' eyes) which probably averages out at about 1.5% when you consider that a large percentage of customers don't actually have a Clubcard.

I'm also baffled as to why Nectar can't come anywhere near to competing with Tesco Deals. It's been particularly surprising to see the massive gulf that's recently opened up on petrol rewards between Sainsbury's v Tesco since Sainsbury's announced they are cutting the rate to one Nectar point (0.5 pence) per litre of petrol. Assuming petrol to be £1 per litre, which it will be soon, this makes Tesco's reward rate a staggering 8 times more generous than Sainsbury's (0.5% versus 4%) if using the points for comparable things like flights or holidays (or magazine subscriptions, as firespire said above). It really is a huge difference.

smokieUK

Not quite on topic, but a friend told me that any large business which generates large cash sales (supermarkets and fuel being the most obvious) does not depend on the margin on their sales to make a profit.

They have extended payment terms with their suppliers (e.g. 30 days) so use the cash to "gamble" on stock and currency markets for this period, and this is where the real money is made.

The shopfront is just a method of getting in large quantities of cash for this purpose. (There was an associated tale that one particular company made it's entire annual profit on day 1 of it's financial year by this method).

penrhyn

I would imagine that clubcard deals work in much the same way as health cash plans. In the latter cash you would appear to be able to take out more than you put in in subscriptions, they make their money on the premise that a lot of people forget to claim the cash.
Same with clubcard points, lots of customers dont have a clubcard and those that do don't always use them, or use them instore.

koru

Since someone has decided to move my thread here, it is now mixed in with all kinds of other chitchat about clubcards,and it is hard to tell who is replying to what question or point.

(Is it really a good idea to do this? I can understand that this stops the forum being filled with lots of Tesco queries, but you can usually tell from the title of a thread whether it is of interest to you, so is it really such a problem to have a lot of separate Tesco threads? By insisting on one mega-thread, if you are looking for a particular Tesco query you have to wade through 700 posts to try to find what you are looking for. And no-one is going to spot my query unless they do happen to wade through the whole thread. And it is confusing to read, because it mixes my thread in the middle of several other separate conversations. And it means that if I subscribe to the thread I now get e-mail alerts that turn out to be replies to other queries, whether I have any interest in them or not. I've got no problem with having a general Tesco thread for people who choose to post there, but for all the reasons above I specifically chose to open a new thread. Ho, hum.)

I note that no-one has replied to my query since this was moved. No doubt they couldn't find it. But if anyone should happen to come across my original query (now post number 668 on this thread) and wish to respond, please include the title "What do Tesco pay deals partners?", so we can spot which posts are relevant?

bazz

Hya. Not sure if I`ve put this on the right board. Please has anyone used clubcard deals for UK airport parking and car hire in Europe? Very tempted, as it would save a lot of money. Only thing is, didn`t want a car for a week, but its the minimum you can hire it for.:j

smartie1976

Hello all.

Tescos have sent me my statement twice.
I have two lots of vouchers, but both have the same barcode and online code.

Should I just chuck the second set as they're just duplicates and won't work.
Any Tescos bods on here that can answer this questions.
(This includes the extra points things at the bottom)

Thanks

ajd3

I get an email from Net Offers and the following offer was in it.

Tesco has a new site they would like you to visit. You cannot buy any clothes from https://www.clothingattesco.com but you can browse their many lines before you visit your local Tesco store.
Tesco are also offering £25 worth of vouchers to spend on clothing in a Tesco store to anyone who registers, so why not log on and check out their various lines - see anything you like and register for your free £25 of vouchers.

This is the link to the registration page
https://www.clothingattesco.com/ManagedStorage/Renderers/Core/Default.aspx?P=Signup.ascx&ref=dgm

Terms & Conditions
Upon registering at https://www.tesco.com/clothing to receive regular email newsletters, entrants will be sent in the post coupons equating to £25 against nominated spend in single transactions on any clothing (£4 off spend of £20, £5 off spend of £25, £6 off spend of £30 and £10 off spend of £50). Coupons will be sent within 6 weeks of registering. Registration is open to all residents of the UK & IOM. Only one registration is valid per individual. See individual coupons for full terms and conditions.

koru

ajd3 wrote:

I get an email from Net Offers and the following offer was in it.

Tesco has a new site they would like you to visit. You cannot buy any clothes from https://www.clothingattesco.com but you can browse their many lines before you visit your local Tesco store.
Tesco are also offering £25 worth of vouchers to spend on clothing in a Tesco store to anyone who registers, so why not log on and check out their various lines - see anything you like and register for your free £25 of vouchers.

This is the link to the registration page
https://www.clothingattesco.com/ManagedStorage/Renderers/Core/Default.aspx?P=Signup.ascx&ref=dgm

Terms & Conditions
Upon registering at https://www.tesco.com/clothing to receive regular email newsletters, entrants will be sent in the post coupons equating to £25 against nominated spend in single transactions on any clothing (£4 off spend of £20, £5 off spend of £25, £6 off spend of £30 and £10 off spend of £50). Coupons will be sent within 6 weeks of registering. Registration is open to all residents of the UK & IOM. Only one registration is valid per individual. See individual coupons for full terms and conditions.

Considering the rock bottom prices of clothes at Tesco, that's a pretty good deal. Effectively, a further 20% off.

You're going to have to spend £125 on Tesco clothes to get the full £25, though.