Many large shops now have free loyalty card options, which unlock often significantly lower prices when you scan your membership QR code at the till – these include Tesco’s Clubcard, Sainsbury’s Nectar Card, Lidl Plus, Co-op Membership, and more.

While they provide handy discounts, they also require you to have a phone number and email address, and in some cases, an app to access the discount.

Increasingly, in-store signage and advertising highlights the large price difference, making it clear that those who aren’t signed up will pay more; including for essential products. A recent Which?  survey found 1 in 5 people said member-only pricing makes them shop more frequently. However, Which? also found that for Clubcard and Nectar offers, 29% of the member-only promotions were at their regular prices for less than half the time, making some savings appear more substantial than they really are.

As digital exclusion experts, we’re here to raise the profile of those who find navigating the online world difficult.  Many of these schemes are not accessible to those who are not digitally confident, or to those who have no or extremely limited digital access. These are also people who would benefit the most from saving money on their shopping.

The 2023 Lloyds Bank UK Consumer Digital Index  puts the number of people who have ‘very low’ or ‘low’ digital skills at over 18 million people. Those on the lowest end are most likely to be over 70 and/or on a low income. People who are completely offline are twice as likely to have a health condition. These are people who are already excluded in a multitude of ways – digital is increasingly becoming another way – and in part thanks to loyalty schemes such as these, this is having a tangible financial penalty as well.

For those of us reading who have been using emails confidently for many years, it’s easy to take it for granted. But let’s break down the process of registering an email address, for someone who has never been online before. You must be able to:

1. Afford a device and internet, or be able to travel to find access to a public computer
2. Set up and log in to the device
3. Confidently navigate to and operate a web browser
4. Follow the online sign-up process to get an email address
5. Remember your password, and be aware of what a good password is
6. Have a phone number to use for recovery or two-factor authentication

Crucially, you must also have the confidence to repeat most of these steps every time you want to access your emails. For new or novice users, this can not only be extremely daunting, but cost-prohibitive in the first place.

Signing up for a loyalty card scheme is similar – with the additional need to download and use an app (or have the know-how to save QR codes as screenshots or to digital wallets) on a smartphone, also relying on mobile data.

Even for relatively confident users – loading the app if a shop is in a signal dead-spot, or if a recent update has logged them out, or the app has crashed – can all pose usability challenges, leaving them no option but to pay the higher prices. Most customers only load their apps at the till when it is time to pay, and may not have the confidence or know how to fix it on the spot.

Another risk of exclusion is older smartphones going out of date – they will stop being able to download apps, as developers stop maintaining older versions in favour of adding more features to newer devices.

It is worth highlighting that some shops will help customers sign up for the cards in-store, and provide a physical card instead of a digital one. This is a good step towards inclusion, however customers still need an email address to sign up.

We’d like to see shops:

• stop offering membership-exclusive discounts on essential goods such as basic food supplies, medication, and sanitary products.
• provide an in-store membership sign-up process with a physical card, which does not require an email address.
• signpost any digitally excluded customers towards local digital inclusion support services.
• ensure their apps work on as many devices as possible, including older smartphones.
  

Aside from providing discounts, the schemes are also in place for the shops to gather detailed data about the spending habits of customers – so they can advertise directly with ‘personalised discounts’, and sell the valuable spending data on to third parties for vast sums of money, who will then use the data for further advertising. There is no opt-out for this – it will be buried in an overwhelmingly complex terms & conditions document – which also raises strong concerns about customers’ privacy.

We’re not saying that loyalty schemes are bad in themselves – but we think it’s important for people to know, in clear terms, what the price of the discount is in more than monetary terms.