Loyalty Dual Pricing – Carrot or Stick?

Feb 26, 2025

Dual pricing is a pricing strategy that has been around for many years and is used by businesses to both attract new customers and to encourage existing customers, (members of a loyalty program), to make repeat purchases gifting them the reward of lower prices.

This pricing strategy offers the same products at different prices, allowing members of a loyalty program to enjoy a lower price. This strategy is the subject of heated debate in the UK market since some of the more high-profile loyalty programs have promoted dual pricing during the ‘cost of living crisis.’ Is this fair, why should all customers have to identify themselves to enjoy a discounted price. Some customers may well be very loyal customers but prefer to remain anonymous.

Many of the big supermarkets within the UK, such as Tesco, Sainsbury’s and Morrisons, have introduced a permanent pricing benefit within their loyalty programs ‘Clubcard Prices,’ ‘Nectar Prices,’ and ‘More Card Prices.’ Members of these loyalty schemes can enjoy discounted prices on a broad range of products. However, if you are not a member, hard luck! The discounts can be incredibly significant, from 10% up to an eye watering 50% off some of the basics, making a real difference at the check-out.

On the face of it, there is no problem, these schemes are free to join, so for non-members, simply sign-up and enjoy.

So why the controversy?

For customers that prefer to remain anonymous or for those that forget their loyalty card or have a technical glitch with the mobile App, they must pay, what to them feels like a penalty. For some this is enough of a penalty for them to become very aggrieved. The dilemma at the check-out is understandable, does the customer really want the hassle to join the program, go home to retrieve their card or shop again later when the App is working. In all cases there is a massive inconvenience to the customer, likely under pressure with a queue of impatient fellow shoppers waiting patiently for their turn at the till. For many customers, they simply ‘take the hit and pay through the nose,’ but do they leave the store happy- you bet they don’t!