interestrateripoff Posted October 9, 2011 Share Posted October 9, 2011 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8815436/Nectar-Card-hit-hard-by-record-low-interest-rates.html The company, which gives discounts to 18m shoppers who use the card at Sainsbury's, Homebase, Argos, BP and Vue cinemas, said that it had been hit by record low interest rates, with the Bank of England cutting its rate to 0.5pc in 2009. Nectar makes much of its money from earning interest from customers' money.The moment a shopper is rewarded with a loyalty point, the retailer forwards the money to Nectar, which then keeps hold of it until the shopper redeems the reward. In the intervening period, which can be many months, Nectar can earn interest. Looks like the business model never factored in record low rates. Quote Link to comment Share on other sites More sharing options...
libspero Posted October 9, 2011 Share Posted October 9, 2011 Looks like the business model never factored in record low rates. I did also wonder whether it is because, due to the depression, people are starting to use points they had accumulated over the years to buy things they haven't budgeted for. If the banks are paying lower interest on a diminishing pot against a backdrop of fixed costs.. that has got to hurt which ever way you look at it. Plus, now they have sown the seed of doubt.. it will only get worse as people attempt to cash in any remaining points in case they become worthless. Rock ¦¦ Hard place Quote Link to comment Share on other sites More sharing options...
Butthead Posted October 9, 2011 Share Posted October 9, 2011 Very good point. I shall spend my Nectar points over the next shopping trip or two. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted October 9, 2011 Share Posted October 9, 2011 Very good point. I shall spend my Nectar points over the next shopping trip or two. +1 I've got 50 quid on my card to spend. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted October 9, 2011 Share Posted October 9, 2011 Have we just triggered a nascent run on Nectar points? Remember if you're going to panic...PANIC FIRST!!!! I'm off up the Sainsburys local now. Going to clear the shelves of beans and tin foil. Wish me luck Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 9, 2011 Share Posted October 9, 2011 Have we just triggered a nascent run on Nectar points? Remember if you're going to panic...PANIC FIRST!!!! but if you're dyslexic CATNIP instead Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 9, 2011 Share Posted October 9, 2011 I'm off up the Sainsburys local now. Going to clear the shelves of beans and tin foil. Wish me luck do make sure you have the right home store assigned to your nectar cards - quite embarrassing spending £50 on beans only to find they won't accept your gazillion nectar points and you have to put them all back Quote Link to comment Share on other sites More sharing options...
hedgefunded Posted October 9, 2011 Share Posted October 9, 2011 I'd rather pay the 1% extra and stop the bastards spying on me. Quote Link to comment Share on other sites More sharing options...
redgenieuk Posted October 9, 2011 Share Posted October 9, 2011 I'd rather pay the 1% extra and stop the bastards spying on me. +1 Quote Link to comment Share on other sites More sharing options...
Harry Monk Posted October 9, 2011 Share Posted October 9, 2011 do make sure you have the right home store assigned to your nectar cards - quite embarrassing spending £50 on beans only to find they won't accept your gazillion nectar points and you have to put them all back They know there is an issue with this and it says somewhere on their website that the customer service desk can sort this out. Quote Link to comment Share on other sites More sharing options...
newbonic Posted October 9, 2011 Share Posted October 9, 2011 I'd rather pay the 1% extra and stop the bastards spying on me. Loyalty cards are an incentive to me to not go to Tesco or Sainsbury's where they bung that 1% on unless you tacitly agree to being spied on Quote Link to comment Share on other sites More sharing options...
Darkman Posted October 9, 2011 Share Posted October 9, 2011 Very good point. I shall spend my Nectar points over the next shopping trip or two. Yes thanks for the heads up, I plan to use my £60 worth of points at the Vue near Blackpool this month. It's going to be a movie frenzy. I just hope there's something decent to see Quote Link to comment Share on other sites More sharing options...
wonderpup Posted October 9, 2011 Share Posted October 9, 2011 but if you're dyslexicCATNIP instead I think their slogan says it best: dyslexics untie! Quote Link to comment Share on other sites More sharing options...
porca misèria Posted October 10, 2011 Share Posted October 10, 2011 Loyalty cards are an incentive to me to not go to Tesco or Sainsbury's where they bung that 1% on unless you tacitly agree to being spied on Only really works if somewhere else actually sells what you want both cheaper and without an equivalent card. Oh, and also without extra hassle: neither Tesco nor Sainsbury is a choice for regular shopping around here. Quote Link to comment Share on other sites More sharing options...
Reck B Posted October 10, 2011 Share Posted October 10, 2011 I think their slogan says it best: dyslexics untie! I knew a dyslexic anorexic once. She choked on her vimto. Quote Link to comment Share on other sites More sharing options...
The Ayatollah Buggeri Posted October 10, 2011 Share Posted October 10, 2011 I did also wonder whether it is because, due to the depression, people are starting to use points they had accumulated over the years to buy things they haven't budgeted for. And also because, compared to the other two loyalty schemes I belong to and collect points for (Tesco Clubcard and KLM Flying Blue), the 'rewards' on offer are pretty stingy unless you get a double-points one; and even then, not great. For example, in reality (factoring in multiple points offers and coupons you get sent through the post etc.), I reckon you probably need to spend around £500 at Tesco in order to accumulate the points needed for a car service and MOT at Nationwide Autocentres, which would cost you in the region of £200 if you bought it yourself. I spend around £1,000 a year in Tesco, as a result of which I get this plus RAC membership for gratis, which makes a total saving of around £350 a year on my motoring costs. In contrast, I have around 27,000 points collected on my Nectar card over five years or so, which I only ever got because when I changed electricity suppliers once, the new supplier gave you Nectar points with each bill payment (this wasn't why I chose that supplier, but thought that if they're giving you the points I might as well have them). That is equal to £137 spent in Sainsbury's, or £274 if I buy stuff on double points offer (and looking on Nectar's site just now, there is absolutely nothing I even remotely want on such an offer). And that's over five years! I have no intention of spending these points until they're offering something I really do want or for some reason I decide to quit the scheme, in which case I'll probably just blow them at Sainsbury's. So no wonder people went a long time accumulating points and not spending them, and if they are now because their back is to the wall and a few years' worth of points will cover one or two supermarket visits, I find that entirely unsurprising. Quote Link to comment Share on other sites More sharing options...
libspero Posted October 10, 2011 Share Posted October 10, 2011 And also because, compared to the other two loyalty schemes I belong to and collect points for (Tesco Clubcard and KLM Flying Blue), the 'rewards' on offer are pretty stingy unless you get a double-points one; and even then, not great. True.. though in a way I'm glad that the Nectar points scheme isn't as good because, as other posters point out.. it means store prices don't need to rise so much to compensate.. so cheaper shopping bill. Never had a problem finding ways to spend Nectar points myself.. after a year I usually have about £30 quids worth (from fuel and food shopping). Over that time some kitchen appliance has probably been destroyed by my wife in which case it's straight down to Argos for a free Toaster/Kettle/Liquidiser/Scale [delete as appropriate]. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted October 10, 2011 Share Posted October 10, 2011 Can you imagine the damage to Sainsburys reputation if the reward scheme they use goes bust and their customers lose their 'money'? Quote Link to comment Share on other sites More sharing options...
scottbeard Posted October 10, 2011 Share Posted October 10, 2011 I'd rather pay the 1% extra and stop the bastards spying on me. Loyalty cards are an incentive to me to not go to Tesco or Sainsbury's where they bung that 1% on unless you tacitly agree to being spied on I really don't get this attitude. What does it matter if anyone knows whether I tend to shop on Tuesdays, or buy more brown bread than white? If anyone wants to know that they could just ask me. If there's something you particularly don't want them to know, just don't use the loyalty card on that visit and pay in cash. I actually see loyalty cards as almost a win-win: money off for me, useful data for the supermarket. The alternative is paying more, and the shops running out of stuff more as they can't predict stock trends as well. Quote Link to comment Share on other sites More sharing options...
singlemalt Posted October 10, 2011 Share Posted October 10, 2011 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8815436/Nectar-Card-hit-hard-by-record-low-interest-rates.html Looks like the business model never factored in record low rates. Possibly so but if in March 2008 someone had told you that the BOE base rate would've dropped from 5% to 0.5% and would remain so well into 2011 and beyond you'd have probably sneered at them. Such a stress test wasn't on any radar. Quote Link to comment Share on other sites More sharing options...
The Ayatollah Buggeri Posted October 10, 2011 Share Posted October 10, 2011 you're not getting this are you?you pay a little extra in the price and then they give you a free toaster every year.it may be many thing s but win-win isn't one of them. All the big retail chains operate loyalty card schemes of some description, and therefore your only alternative is to use independent retailers who don't. The problem is that the overheads and the supply logistics they have to deal with mean that even without a loyalty card scheme, they are just as expensive if not more so to the end customer. So you might as well belong to a loyalty card scheme because, as you point out, if you don't, you're paying for them anyway. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 10, 2011 Share Posted October 10, 2011 Do you have a nectar card?.......No I am sweet enough. Quote Link to comment Share on other sites More sharing options...
libspero Posted October 10, 2011 Share Posted October 10, 2011 All the big retail chains operate loyalty card schemes of some description, and therefore your only alternative is to use independent retailers who don't. The problem is that the overheads and the supply logistics they have to deal with mean that even without a loyalty card scheme, they are just as expensive if not more so to the end customer. So you might as well belong to a loyalty card scheme because, as you point out, if you don't, you're paying for them anyway. Well, that's a slight exaggeration. Lidl, Aldi, Morrisons.. to name a few who don't run them. Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted October 10, 2011 Share Posted October 10, 2011 Loyalty cards are an incentive to me to not go to Tesco or Sainsbury's where they bung that 1% on unless you tacitly agree to being spied on If you use a credit card you might as well use the loyalty card as they will still know what you purchase and when. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 10, 2011 Share Posted October 10, 2011 (edited) If you use a credit card you might as well use the loyalty card as they will still know what you purchase and when. Why....tesco do not or any other supermarket for that matter have access to my credit card or debit card spending.....I tend to shop in shops that do not offer a loyalty card.... you get more for less....everyone is a winner. Edited October 10, 2011 by winkie Quote Link to comment Share on other sites More sharing options...
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