The Clubcard scheme operates in the United Kingdom, Ireland, Czech Republic, Hungary, Poland and several other countries, and in the UK market in particular has been highly successful, with over 15 million members as of 2010.
In 1993 Terry Leahy asked the Tesco Marketing team to investigate the potential of loyalty cards. In the past Tesco had run Green Shield Stamps as a promotional tool which rewarded people for visits and spend but gained no customer information. The initial team led by Grant Harrison, researched programmes across the world and developed a proposal which showed that a loyalty card could be very effective. The key change since the days of Green Shield Stamps was the ability to cost effectively track individual customer behaviour using a magnetic stripe card. In 1994 Harrison attended a conference where Clive Humby from marketing firm dunnhumby was speaking. Dunnhumby was already working with clients such as Cable & Wireless and BMW, and Harrison approached them to help with the loyalty card project. Successful trials throughout 1994 led to the Tesco board asking Harrison and Humby to present to the annual Board strategy session. The first response from the board came from Tesco's then-Chairman Lord MacLaurin, who said "What scares me about this is that you know more about my customers after three months than I know after 30 years."
In January 1995, Frank Riolfo, a former member of the Royal Army Medical Corps, attempted to blackmail Tesco, forcing the introduction of the previously trialed discount card. Threatening to inject AIDS-infected blood into stock, Riolfo demanded the company make loyalty cards available to customers. The cards, he specified, were to contain magnetic strips allowing them to secretly function as ATM cash withdrawal cards. Coded copies of the PIN code were published under his instruction in National newspapers. Clubcard was subsequently launched nationally with a Direct Marketing campaign by Evans Hunt Scott, Terry Hunt's advertising agency. Hundreds of customers, including Riolfo's wife, signed up to the scheme and collected a card. Riolfo and his wife then toured the country withdrawing cash until they were eventually caught on 22 April 1995. Frank Riolfo pleaded guilty and was jailed for six years, after appeal. Little coverage of these events remains online, although they were fictionalised by performance poet Alexander Velky as The Marketing Genius of Frank Riolfo. The loyalty card scheme was not discontinued.
In late 2000 Robert Edward Dyer made a similar attempt at extortion involving Clubcards with a magnetic strip for ATM withdrawals. Dyer sent several letter bombs, one of which exploded when the recipient opened it, before Dyer was arrested in February 2001.
David Sainsbury, then chairman of J Sainsbury plc, rejected the idea of introducing a similar scheme. However, the effect that Clubcard had on Sainsbury's sales led to the reversal of that decision, with the launch of the Sainsbury's Reward Card in June 1996.
After two slight amendments to the design of cards in the 1990s by Evans Hunt Scott's creative team, the scheme had a major relaunch in 2005 with all members being sent personalised cards and key fobs which could be scanned at the checkout, rather than swiped. The scheme was again relaunched in 2008 with all seven million members once again being sent new design cards and key fobs. The Tesco Clubcard scheme was introduced into the Republic of Ireland almost immediately after Tesco's acquisition of Power Supermarkets Limited (now Tesco Ireland), and operates in similar fashion. It is an extension of the UK scheme, not a separate scheme, so Irish Clubcards can be used in UK stores.
In 2007, Tesco Clubcard was first introduced in all Tesco Extra stores in Malaysia and later in all store formats. In Malaysia, every two Ringgit spent earn 1 Clubcard point. Within two weeks of the launch of Clubcard in all Tesco stores in Malaysia, there were over 800,000 applications.
The Tesco Clubcard scheme was introduced into Polish Tesco Stores in 2008, and SR Slovakia at the end of 2009. As of September 2010, these markets have 1.5m and 850,000 cardholders respectively. Though operating in a similar fashion to the UK scheme it is independent, so Irish and British Clubcards can not be used in Slovak or Polish stores. In Slovakia every one euro spent is 1 Clubcard point (excluding petrol). Clubcard was launched in the Czech Republic and Hungary in August and September 2010.
When shopping at Tesco or using Tesco services (such as services from Tesco Finance), Clubcard holders receive one point for every £1 (1 point for every €1 in Ireland) they spend. Holders can also get extra points on special offers. These points are stored and built up and at least four times a year (there are sometimes "surprise mailings") the holder receives a statement and vouchers to the value of points they have saved. (They have to have saved at least 150 points to receive a voucher). Vouchers can be spent instore on shopping, online on grocery home shopping or direct, or used on Clubcard Rewards where they can be worth three times their face value on selected Rewards in the U.K and up to four times their face value in Ireland. These can be used to obtain discounted day trips, magazines, hotel breaks, restaurant tokens and other offers.
As part of the Clubcard 2 launch, it was announced that, from 17 August 2009, all instore and online purchases would attract double points (2 points per £1). Reports indicate that this initiative was successful in increasing the number of active cardholders from 14 million to 15 million in the market year 2009/10. However, this reverted to 1 point for £1 spent at the end of 2011.
Tesco Bank credit cards originally acted also as Clubcards, collecting points from purchases in Tesco stores and on-line. From May 2010, however, they also collected one additional point for every £4 spent on credit card purchases from any outlet.
From the beginning of 2014 (the actual date varied between outlets), Tesco Clubcard holders can collect points from Esso fuel stations, at a rate of one point for each £5 spent.
Clubcard holders are also entitled to free access to the Clubcard clubs which include: baby and toddler club. There is also a facility to save vouchers to be sent near Christmas, similar to a Christmas savings scheme.
Green Clubcard points
Green Clubcard points are earned when customers re-use bags when shopping in store (one point per bag, except Wales and Northern Ireland), or opt out of receiving bagged products when shopping online (one point per ten items delivered). They can also be earned by recycling a limited number of products, currently mobile phones and ink cartridges, through Tesco-branded recycling services. Once earned, Green Clubcard points are equal in value to normal points, but are listed separately on receipts and Clubcard statements. Once stores were required to charge 5p for single use carrier bags (under Government Legislation) the Green Clubcard points option was removed.
Formerly known as the 'Double Up', then relaunched as the 'The Clubcard Voucher Exchange'. The Clubcard Boost is the new name for Clubcard Rewards and the Clubcard Voucher Exchange; it was launched in 2013. The Clubcard Boost in-stores works the same way as the previous schemes (for every £5 in Clubcard Vouchers, customers receive £10 in Clubcard Boost tokens. As with previous schemes there are only selected departments included: Baby & Toddler - including Nappies & Wipes, Cosmetics & Fragrance, Clothing, Opticians, and Cook, Home & Dine. It has been said that extra Seasonal departments will be added at Christmas and Summer events. Another change to the scheme is that it now runs all year round the current departments are valid up to and including 31 December 2013, Boost tokens are then valid for 6 months after the date they are issued.
Customers can still 'boost' their Clubcard vouchers to use for days out, restaurants and holidays by going to the Clubcard website. Examples of available brands are Monarch Airlines scheduled flights, Hungry Horse restaurants and Merlin Attractions.
Clubcard Fuel Save
at the Pay@Pump. Exclusions from the £50 spend included: Tobacco, Lottery, Gift Cards, Baby Formula Milk and Fuel.
The scheme ended on 31 August 2015 with redemptions available until 30 September 2015.
Services that take part in the Clubcard scheme:
- Tesco stores
- Tesco Petrol stations
- Tesco Direct
- Tesco Bank
- Tesco Telecoms
- The Nutri Centre @ Tesco
- AVIS - Earning Points Ended 1 Feb 2009
- E.ON UK
- Marriott Hotels - Earning Points Ended 1 April 2008
- National Tyres
- Nationwide Autocentres
- Most UK Esso Petrol stations
Some Clubcard users[who?] have concerns about the information Tesco and dunnhumby hold and what they do with it. Every time a Clubcard is used, a copy of the store shopped in, products purchased and price paid are stored against the Clubcard account. Applicants are asked to provide personal details such as name, address and children. Tesco have stated that this is to help them pick vouchers that are relevant to the holder and also monitor trends to help product availability.
In February 2014, over 2000 email addresses, passwords and voucher balances were leaked online following a security breach. Tesco shut down all affected accounts and offered replacement vouchers to impacted customers.
Mobile phone applications
Starting in late 2010, Tesco launched applications for iPhone, BlackBerry, Android (operating system) and Nokia Ovi, so points can be collected by presenting a barcode on the handset instead of a keyfob or card. This application was relatively simple on launch, offering little more than a barcode, however updates have increased functionality to include features such as the ability to view current offers instore. An unofficial Android application is also available.
Tesco announced in February 2013 that they will be launching their own TV and film on-demand service. The service would be free to Tesco customers, with no charges, subscription or contract. On 28 October 2014, the short-lived Clubcard TV was closed.
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Privacy campaigners are convinced that big companies, from Google to Tesco, know too much about us - and are not careful enough with our data....While call centre staff don't have access to your data, details of all purchases on Clubcard are stored for up to two years.
- Bloom, D. (2014). Hackers leak more than 2,000 Tesco passwords online. [online] Mail Online. Available at: http://www.dailymail.co.uk/news/article-2559256/Tesco-security-breach-hackers-leak-2-000-passwords-internet-shoppers-online.html [Accessed 27 Feb. 2014].
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