The Best Buy Loyalty Journey

Jan 31, 2023

Best Buy is a multinational consumer electronics retailer headquartered in Richfield, Minnesota, with more than 1,000 stores and more than 90,000 employees in the United States and Canada, this retailer is one of the most important in North America.

Best Buy launched its reward Zone loyalty program in 2003. At the time the program offered members rewards with an annual membership fee, members paid US$9.99 per year for the right to participate and earn 100 reward points for each US$1 spent. The annual fee was partially offset by a 5,000 point enrolment bonus. The programme effectively offered a 4 percent rebate as reaching a 12,500 balance triggered a US$5 award certificate, applicable to any Best Buy purchase over US$10.

By 2006, Best Buy announced the launch of the  ‘Best Buy Reward Zone Program Mastercard’ credit card, issued by HSBC North America. The annual membership fee for loyalty was removed, offering free access to the programme for everyone. The new credit card provided automatic enrolment in Reward Zone and purchases from Best Buy, made using the card, earned 4% and up to 2% on purchases made elsewhere.

In 2016, Best Buy made significant changes to its programme, adding three tiers to the program with free shipping benefits, but devaluing points earned by fifty percent or so depending on the customer tier impacted. The changes effectively concentrated benefits towards “Elite Plus” members who spent at least $3,500 per calendar year at Best Buy.

Fast forward to last week and the programme, now known as My Best Buy, allows members to earn 1% back in rewards and a $5 reward for every 250 points accumulated.

The latest announcement says that  “Beginning January 9, 2023, My Best Buy members will get free shipping with no minimum purchase required” (but with some restrictions on shipping options) and “On February 14th, reward points will become a benefit that’s exclusive to My Best Buy Credit Cardmembers.”

That message is diplomatic loyalty marketing speak to say that points will no longer be earned by program members and will be available only to holders of the My Best Buy Visa card. The programme offers My Best Buy Credit Cardmembers, 5% back in rewards, 2.5 points for every $1 spent made with a My Best Buy Credit Card. Nearly 20 years since it first launched a loyalty programme, Best Buy has returned to a payment tender specific model, an interesting choice considering that most retailers discarded this approach many years ago in recognition that it was the customer that mattered most, not how the customer chose to pay for their purchase. However, this switch probably says more about the economics of the business with margins squeezed and competition fierce. The likely financial support from the card issuer is something that will underpin this programme, but is it sustainable. Look out for another programme announcement soon!

Article by Bill Hanifin, The Wise Marketer. Edited by LCUK.