Can we get more control over how we manage the system?
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Pete
Rewards are very powerful, we have stopped offering any affinity dscounts (BMC, BCU, BC, National Trust and all the other bodies that don't promote our business but seem to give their members a sense of entitlement to a discount).
We offer a more generous level of reward points than the default setting and with some customers this really seems to work.
However, there are a couple of areas where if we could customise the settings a little more, I believe we could make this a more powerful tool.
1) Online, we get customers who buy a single heavily discounted item with free shipping, a day later they buy another, taking the reward points from their earlier purchase and applying those to another item (often the same as the one they bought the day before) and we incur two lots of postage. If we could set a custom period of delay for when the points hit their account, we may be able to get that customer to buy both in the first purchase and because they now have twice as many points, they come back to buy from us again in the future. I'm thinking that I would set our system at 14 days. I think that's just long enough to prevent them exploiting the loophole, but not long enough that they've forgotten about us. It's also better than Tesco who give you your points quarterly.
2) Active accounts, we currently have our accounts set with points deactivating after two years (again we looked at Tesco and the lifespan of their vouchers), but we get customers who want to "rack up" their points saving them for a "big purchase". If we could set it so that the points don't deactivate if the account has been active in the previous 12 months, or two years, then these customers could theoretically build their points over a prolonged period. In some respects this could be a win/win for us as retailers with the value of the points accrued effectively decreasing as prices go up with inflation, equally we wouldn't have to be checking expiries and reinstating points that have expired because the customer has let them rollover for too long. If they're a regular, then the last thing we want to do is alienate them by telling them they've lost their points.
Just a couple of thoughts I had, I'm interested in hearing other folks opinions?
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Chris
I'm 100% on board with the 14 day delay for points to be awarded. The sneaky customers can definitely abuse the system and the busier we get the harder it is to catch this abuse of the system.
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Pete Baars
Here's an example, customer bought a jacket on sale. Wrong size. They ordered the correct size, on the second day, but utilised the reward points from the jacket they were returning.
Had they not had access to the additional discount, they MAY have simply processed a return and saved us incurring two lots of transactional fees.
We're now in the situation of do we:
A) refund minus the points used? and risk alienating the new customer
B) refund in full and adjust the rewards balance?
C) suck it up and hope they shop with us again as there is an unused rewards balance of £7.95.
It was a sale item reduced by 25% as it was, a further 5% in reward points, two lot's of postage, two lots of transactional fees, there's next to nothing left in this transaction now anyway. Our rewards work best with instore customers, but despite offering a higher than average level, we don't seem to get return online customers using them. Maybe £7.95 isn't enough free money to tempt someone back these days?
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Peter Carol
I'm all for number 1, it should have a minimum. Currently you can make a second transaction on the same day and use points from their first transaction. We also get some customers using loyalty points from a first purchase when they buying a different size, and then return the wrong size, so it would make sense not to put points on until the refund period has expired.
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Pete
Peter Carol, I agree we have had the points applied to a second purchase and then had to refund the first (wrong size), never to see that customer again. They didn't save much as we don't offer free returns, but it all adds up to ever diminishing margin.
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Eoghan Sheehan
We have a special rule set for Sale and reduced price items so items we have on sale only get 1/3rd of the usual number of points automatically so this way we're not giving too much out on reduced items and in a way helps negate the effects of your first point Pete
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Pete
Eoghan Sheehan we also reduce the level of points offered on sale items by 50%, but it doesn't stop some people exploiting the loophole and ordering a second item, the day after the first to secure a further 5% saving on their second purchase.
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Scott
Agree with suggestion 1 for the noted reasons