Australia's loyalty programs mislead consumers about savings

A recent report from the Australian Competition and Consumer Commission (ACCC) reveals that supermarket loyalty programs may be influencing customer spending more than they realize. The report, which is 441 pages long, examines how these programs affect the buying habits of consumers across Australia. The ACCC found that to earn a $10 discount, shoppers at Coles and Woolworths often need to spend about $2,000. The report suggests that these loyalty programs can be confusing, leaving customers uncertain about the true value of their discounts. The use of points systems makes it hard for consumers to see the real benefits of participation, which could lead them to think they are getting better deals than they actually are. The report also talks about "gamification," which uses game-like features to encourage shopping. Customers may increase their spending to reach loyalty program goals, influenced by elements like point systems and challenges. As customers get closer to achieving rewards, they are likely to shop more to gain those discounts. The ACCC has recommended that Coles and Woolworths provide clearer information about their loyalty programs in easy-to-understand summaries. It plans to review the loyalty practices of these supermarkets in 2028 to assess their impact on both consumers and competition. Coles has stated that it will consider the ACCC's recommendations and has already begun improving how it presents promotions. Woolworths also expressed commitment to enhancing customer experiences, especially in response to rising living costs.