Many stores use apps and point systems to retain customers. Now, Ikea is joining in. Here’s how the loyalty bonus works and what’s behind it.
Whether it’s Edeka, Lidl, Rossmann, H&M, or Rewe – nearly all major markets now entice their customers with loyalty points. The principle is simple: Customers shop, open the store’s app, scan their QR code at the checkout, and instantly receive discounts and other benefits on their smartphones.
This makes loyalty bonuses seem like a great deal – you spend money on things you need anyway and get something back in return. However, behind the scenes, companies are not necessarily motivated by goodwill: By offering loyalty points, retailers aim to bind buyers to their stores and encourage them to shop there more often, warns the Consumer Advice Center of North Rhine-Westphalia.
Soon, another company will join the loyalty points club: Starting from September 4, Ikea customers can collect points while shopping for furniture.
How does Ikea’s loyalty bonus work?
To participate, customers must be part of the Ikea Family. Points for the loyalty bonus are accumulated through purchases in the Ikea Family app: For every five euros spent, one point is credited, Ikea Germany confirmed upon request. For example, 35 points (equivalent to a purchase of 175 euros) can be redeemed for a free breakfast, 75 points (375 euros spent) for a main dish, and 335 points (1675 euros spent) for a 50-euro voucher.
But points aren’t just earned through shopping. Logging into the member profile, becoming a member for the first time, saving a new shopping list in the profile, and participating in Ikea Family events that require registration also earn points.
The Ikea Family program has existed for a long time, but until now, members only received a free hot drink and some discounted products. Additionally, members could exchange products that were damaged on the way home or during assembly within four weeks under a “transport and assembly security” policy.
What’s behind loyalty programs?
“Customer apps in retail can be convenient but sometimes offer deep insights into your life as a user,” says the Consumer Advice Center. “When customers use their cards during a purchase, the location and time of purchase, as well as the price of the item, may be stored.”
These apps can analyze users’ shopping behavior to draw conclusions about their personal situations. The Consumer Advice Center offers an example: “You no longer buy red wine but have recently started purchasing non-alcoholic sparkling wine? You might be pregnant, and suddenly you receive a discount offer for pregnancy vitamin juices.” If customers shop at various stores and use different apps, this information is shared with a multitude of retailers. Moreover, increased exposure to advertising can lead to more impulsive and additional purchases.
Another downside is that accumulated points usually must be redeemed for a reward within a specific timeframe, or they expire. At Ikea, for example, points will be valid for 24 months from the time they are credited and will automatically expire afterward. Many loyalty cardholders may not want to risk losing the points they’ve accumulated by shopping elsewhere, which might discourage them from comparing prices. Furthermore, customers who opt out of membership and discounts often pay slightly more than necessary in stores with loyalty programs. “Naturally, customers who don’t use loyalty cards end up subsidizing the discounts of those who do.”
Does this mean you should stay away from loyalty programs? The Consumer Advice Center advises paying attention to what information is required when applying for the card and only providing the minimum necessary. Additionally, users should check the app settings to see which permissions are enabled. “For instance, ask yourself: Does the supermarket app really need to have my exact location data at all times?” If not, the relevant permission should be revoked.
