Nearly every household in the country now has a flybuys card and the promise of saving a couple of bucks when it comes to shopping at Coles. We have a look at whether Coles' latest move in the supermarket chess game for the nations stomachs and wallets is a smart play or a dud move.
Coles sent a silver envelope to eight million households across the country offering discounts across a range of their products and an invitation to join the revamped flybuys scheme in an attempt to win the stomachs and wallets of the country.
At the heart of this campaign is a 10% discount off five product groups of the customers choosing and new and improved flybuys rewards. Catchy branding at its finest, 'My5' at Coles lets customers direct discounts to the most expensive items in their shopping baskets. The campaign also marks a revamp for the flybuys scheme offering customers more bang for their buck. Under the new scheme when shoppers spend $50 they get 50 points worth 25c, an improvement on the previous system where $50 only got you 20 flybuys points worth 16c.
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How to earn flybuys points
For those who shop at Coles stores and flybuys partners including Liquorland, Kmart Target and AGL, when you spend a dollar, you earn a point. Customers who use the Telstra Pre-Paid phone service can earn three times the rate when they load up on credit and there's the potential to earn four points per dollar spent when you combine Coles car and home insurance with a 1st Choice Wine Drop membership.
For those who are using these services and shop frequently at flybuys bonus partners, there is a good opportunity to accelerate your earning. But for everybody else, switching provider could be difficult to justify unless there's some serious value on offer. And unfortunately for flybuys, even with an increase in the value of their rewards, unless you combine the offer with a Coles Mastercard, which doubles the rate of accrual at Coles stores, there's little value to be found here.
Rewards value with the Coles Mastercard
Using a Coles Mastercard will get you flybuys points twice as quickly. For all new applicants, you will earn two points for every dollar spent at Coles as well as earning points on your day to day spending, so you're not just restricted to Coles and flybuys participants.
Looking at the leaflet that was sent out with the cards, Coles put an average yearly spend on day-to-day expenses like groceries, liquor, electricity etc. at $14,040 for 14,040 flybuys points.
For every 2,000 flybuys points you earn, you're eligible for $10 off your next grocery bill.
Taking the standard rate of accrual minus spending at bonus partners represents a saving of just 0.5%.
But if you pay for it all with your Coles Mastercard in addition to taking out an insurance policy ($500p.a.) the number of points you earn jumps up to 52,100 which comes to $260 off your grocery bill in a year. When you do the math, a saving of $260 on a yearly spend of $4,540, only comes to about 1.8% of the total bill, which isn't much of a reward for a customer's loyalty across a variety of merchants but is consistent with other rewards schemes offering half a cent to a cent and a half return per dollar spent.
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The My5 Discount
To set up the My5 discount at Coles supermarkets, you have to register your card on the flybuys website. Registration is simple and only takes about ten minutes. You will be prompted to enter your personal information including things like address, email, telephone number etc. and if you are concerned about providing your personal information, not all the fields need to be completed, only the ones that are marked with an asterisk. Not all pages have to be completed either. The last page before picking your 5 product groups is a survey into your shopping habits and privacy aficionados will be pleased to know it can be skipped.
Pick your product groups
When it comes to getting your discount, you will have to nominate where you want the savings to go. You can choose between browsing the aisles yourself, or go with Coles-preselected staple product groups which are grouped mainly by type, brand and weight. Say you wanted to receive a discount on sausages you would select the sausage product group which has about 17 items.
You have the option of going for 10% off one item in the sausage group and a further 10% off four other product groups or you can purchase five items from the sausage product group with 10% off the five most expensive items. Confirm what you want to get, because once you make your selection you're locked in forever. It will take three days or so before the system has registered your request and then you're free to start shopping.
It sounds like a pretty decent deal, right? And to an extent it is. There's nothing sinister about rewarding customers' spending by shaving a little off the price but there are a few terms and conditions that customers should be aware of:
- The offer ends on the 31st of October 2012: Coles said they were thinking of extending the offer but it's anyone's guess as to whether it will actually continue.
- Expensive gift card and tobacco products don't qualify for the discounts.
- You must spend $50 in order to be eligible for the 10% discount: It's not hard to see what Coles are going for here. They're aiming for the customers that add a little extra into their trolley in order to qualify for the discount on their selected product groups.
How to make the discounts work for you
To make the discounts work for you, it's important to stick to your regular spending habits and not to go overboard shopping with the mindset of reaping rewards. Some of the most expensive items in-store are not available for a discount and 10% off the standard supermarket items like bread, milk, pastas and meats etc. is basically a negligible saving in the long run.
For the desired results, it's better to buy expensive brand names covering things like vitamins, coffee and supplements. These are some of the most expensive product groups that are eligible for the 10% off and naturally when looking to save money you're going to go with the most expensive products first. But if you don't regularly buy these items there's little chance you will see more than a few dollars wiped off your weekly shopping docket.