Duane Reade Deploys Rewards Program Shrink Ray

Even retailer rewards programs can fall victim to the Shrink Ray. The latest victim? Duane Reade. Reader RC was saddened to learn of he change, and lays it out for us.

Duane Reade’s rewards program used to give you a $5 off coupon for every 100 points you earned at $1 per point of spend. Therefore, you essentially got 5% off of everything but pharmacy drugs. I guess they decided it was too generous for their bottom line because they changed the name of their program and greatly diluted the value. You now get 2 points per dollar of spend but it takes 500 to redeem. They’re of course perfectly within their prerogatives to change it and of course need to market their brand positively, but I just hate when companies try to disguise the fact that they’re actually diminishing the value. “Earn twice as many points for every dollar you spend!” It’s insulting, although I’m sure many won’t realize they went from getting a 5% discount to a 2% discount.

The credit card companies are constantly doing the same thing – acting like some change they just made is a good thing when it’s actually terrible. Coke Rewards did it. Airlines do it. Banks do it. Everyone in Corporate America. It’s understandable but nevertheless insulting every time they try to fool us into thinking a bad change is good for us. And they wonder why we don’t trust a thing they say.

Would a drastic change to a rewards program change your buying habits, or do you find your rewards elsewhere as a consumer?

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Edit Your Comment

  1. snobum says:

    Wasn’t this done a year ago?

  2. agent 47 says:

    There’s a local outdoor store (read: guns and ammo) that gives a $10 gift card for every $500 spent. It has spurred quite a few of my purchases there. If they were to get rid of that, I’d probably just go elsewhere.

  3. COBBCITY says:

    “”Earn twice as many points for every dollar you spend!” I see the OPs point. I do hate when companies treat consumers like they are stupid. The same is true of any company that pushes you to accept an electronic bill via e-mail (cable, wireless phone, etc) because doing so is “Going Green” or “Doing Your Part to Help The Environment”.

    NO, it’s to same the company from having to spend $$ printing and mailing you a paper bill. Pretending it’s because they worry about trees is a lie to make more people sign up.

    Dwaine Reede is slowly becomming Walgreen’s even if they don’t say so.

    Here we have Stop & Shop, the biggest supermarket chain. They have what they promote as a “terrific gas rewards program”. Many of their stores have gas stations and it used to be you would get 10 cents off per gallon for each $50 you spent in store. They then “improved” the program and now you have to spend $100 to get that same cents off. You should see the line at their gas stations from people thrilled at the 10 cent savings they are getting on gas.

    However, people don’t seem to do the math. Stop & Shop is not known for being a cheap supermarket. Most regular cars use perhaps 15 gallons of gas and that is if your tank is almost empty. SO, what the program really is is “Spend $100 in our store and we’ll give you just $1.50 off your gas purchase”. If the store put a coupon out that said “$1.50 off a $100 order” the public would laugh at them. However, call the same discount “10 cents off per gallon of gas” and they can’t wait to spend $100 and run to the gas pump to get their $1.50.

    Consumers can indeed be stupid.

    • Daverson says:

      Stop & Shop’s gas reward program can be quite a bit better than you depict it.

      The Stop & Shop in my town is one of the least expensive to shop at (there are at least six supermarket chains operating within a couple minutes drive of my house – competition here is fierce.)

      In addition, I live in a “border town.” Gas prices here average 20 cents higher than just over the state line. So, when I take my rewards points to one of the conveniently-located out-of-state Stop & Shop gas stations to fill up, I save 30 cents a gallon or more over hometown gas prices. Since I’m shopping at Stop & Shop anyway, it’s worth using the rewards.

      • COBBCITY says:

        Hi Daverson,

        Yes, while Stop & Shops gas program is indeed just $1-$2 off a tank of gas for spending $100 you are right. It can indeed be better if you live in a border town like you do.

        Interesting. I know supermarkets set prices by community and what competitors are nearby, but in my area I know of no one that does not consider Stop & Shop pricey. My mother won’t set foot in one.
        The only one worse for us is Big Y. Not sure if you have them, but other than their specials we call them “Sax Fifth Supermarket”

        • Daverson says:

          Yeah, Big Y. Very high prices, mediocre stuff. They’re the highest-priced store in town, but they’re cheaper than nearby Highland Park Market, with their carpeted aisles and smartly uniformed employees. Stop & Shop prices in my town are actually lower than the Stop & Shops in neighboring Massachusetts towns, and their gasoline prices use “zone pricing” as well. I can take a 10-minute drive north and the Stop & Shop gas prices even before the 10 cents off are 20 – 25 cents lower than the Stop & Shop gas prices at home.

    • TaraMisu says:

      Daverson we must live in the same town. I too live in a border town that has about 4 (with an Aldi’s on the way) grocery stores in a 2 mile section. Those S&S gas points are a valuable asset to the store because that is what keeps us shopping there, it’s their only edge… when I head over the state line I end up saving 30-40 cents per gallon.

      • Daverson says:

        TaraMisu, I bet we do live in the same town.

        Stop & Shop holds a slight advantage for me because of their produce and meat markdowns, the gas rewards, and careful shopping for specials. Also, I like the grocery scanners which help me get out of the store a lot faster because I hardly ever have to wait in line anymore. But ShopRite has been stealing more of my business since they opened up.

        And I’ll be really happy when Aldi opens, too.

        • TaraMisu says:

          I like ShopRite too…. it’s been so crowded since they opened I’ve only gone once. I’ll give them a try again soon.
          This is weird, you’re probably my neighbor!

    • catnapped says:

      That’s just in line with Ahol(e)d policies at their other stores. Giant has always been $ .10 off (gas) for every $100 spent.

      The gas rewards at Weis Markets are even worse… 10 cents off for every $50 spent, but you have to spend the entire $50 multiple in one trip (no accumulating points). Means $49.99 gets you zilch and $99.99 only gets the 10 cents off.

    • ramfan1701 says:

      While it is stupid to spend $100 just to get a 10 cent discount on gas, it’s not always a bad thing. I always do my grocery shopping at King Soopers (a Kroger brand) because I like their prices and selection best of the local options. They do the same promotion, so if you’re going to spend the money anyways, it’s nice to have a bit of a discount on the gas, since the 10 cent off usually makes them 3-5 cents cheaper than any other local gas station. Sometimes every little bit helps.

  4. pantheonoutcast says:

    A while back, a fellow commenter mentioned that I should read the book “Jennifer Government”; after finishing it, it’s all I can think about when seeing articles like this. In fact, I propose that “Jennifer Government” be the unofficial official book of The Consumerist.

    Go Team Advantage!

    • raydee wandered off on a tangent and got lost says:

      I read that a couple months ago. It’s pretty true. While we are not quite at the point where shoe companies take out random assassination contracts *on their own customers* to increase demand… sometimes it feels that we are getting closer.

      And with all of the fast-food-sponsorships going on in schools, how far away are we, really, from having schools outright RUN by corporations?

      • hypnotik_jello says:

        It’s not outside the realm of possibility. Besides, you know, the best consumer from the point of view of a corporation is an uneducated one. Better to go into the schools to make sure kids aren’t thinking for themselves (not that much of that goes on now, I will admit).

        • nybiker says:

          Well, Sy Sims used to say (and his store still uses the line), “An Educated Consumer is Our Best Customer.”
          But your comment about sponsorships in schools is true. And that is why I rail against all the corporate johns sponsoring college bowl games, stadium names, event names (think non-sports stuff too – e.g., concert tours), and being the official widget of some company or organization. I have my own boycott of any company I find is doing any sort of big-time sponsorship (the local hardware store or local pizza joint sponsoring the local little league is fine, so long as the it all stays local). Granted, I can’t avoid all the johns (there are times I am stuck using fedex). Hell, I’ve been a citibank customer for a long time, but I am not going to drop ’em just because of their wasting money on the new stadium. But if I have to leave for some reason, I will be looking at banks that aren’t johns. No ING, TD Bank, or B of A for example.

          As for shrink ray effects, I generally stop buying the product from that maker. No Breyer’s anymore. Tropicana loses on 2 strikes: the field and the shrink ray.

          And not that I am an avid moviegoer, but I refuse to go to a movie that uses the product placement ads as ads for the movie. You think you’re seeing an ad for a cell phone (as an example) but then they say ‘come see us in this-new-movie-that-we-paid-big-money-for-so-you-can-see-our-product-and-then-buy-it. Nope. The most I do is wait for DVD and tell Netflix to send it to me (after its requisite ‘long wait’).

          I don’t shop in a Duane Reade often enough to justify their rewards card.

  5. punkrawka says:

    I try not to plan my purchases around reward programs. I just try to shop for the best deal and treat anything I get back as a bonus.

  6. Griking says:

    This most likely has to do with Duane Reade being purchased by Walgreens earlier this year.

  7. pecan 3.14159265 says:

    I’m thinking about ending my B&N membership because of this. Members still get 10% off everything in stores, and they get 20%-40% depending on the type or category of book they’re buying (B&N bestsellers, hardbacks, etc.) but the online coupons aren’t coming as often. The biggest change to shopping at bn.com as a member is that you no longer need a minimum for free expedited shipping, which is great, but the entire reason I was willing to pay $25 a year for membership was that the coupons (which are 99% members-only coupons) saved enough money to make up the cost of the membership and then some. I do a lot of Christmas shopping at Amazon and B&N. If the coupons start drying up this Christmas, I’m not sure I’ll continue my membership.

  8. SwoonOMatic says:

    The MyCokeRewards (Coke / Coca Cola Rewards) program has shriveled down over the past couple of years. You used to be able to save up for decent rewards, then they got rid of anything worth-wile and now they just want you to spend your points on Sweepstakes.

    They have junk at really high points now. What a waste of time, but I’ve entered so many points and I don’t know what to do with them.

    • selkie says:

      I miss the days when you could get quite a nice t-shirt out of the Coke Rewards program for about 150 points instead of 650 points like it is today. I’m still putting my codes in, though I’m not sure why I bother.

    • JMH says:

      We’ve saved up a ton of the Coke rewards points at my office over the past couple of years, since there are reliably a few of us buying a 20 oz. Coke/Diet Coke/whatever with lunch each day, five days a week, every week. Since the rewards being offered have become less interesting, we’ve taken to just ordering a bunch of coupons for free sodas as often as it will let us. It’s not exciting (as compared to the hot dog roller they used to have that we had our eye on, but which certainly would have stunk up the office), but it’s still getting something for free which we would otherwise pay for.

  9. dbeahn says:

    I’ll lose my Silver level rewards at Best Buy at the end of this year. As a result, nearly all of my purchases will move to Amazon. At the normal level, it makes more sense to pay the lower Amazon prices and get my 1% back on my Amazon card. This year is an anomaly – I usually spend over the $2500 limit on games and electronics, but because I bought a Macbook Pro (which I needed customized) from Apple, I won’t qualify for the Silver level reward plan this year. As a result, Best Buy will lose my average of $3000 a year business to Amazon pretty much forever.

  10. jennesy says:

    As expensive as Duane Reade is the change in the rewards program has made me a little less likely to shop there. I could somewhat justify paying more than necessary for the convenience of shopping at DR instead of waiting for a trip to Target since I knew that I was getting 5% back. That said, depending where in the city you are DR might be your cheapest option because you’re still getting a small discount.

    That said, the main reason that I would choose another drug store over DR is the cash back with debit card purchase issue – you can’t get cash back from DR as you can from Walgreens, Rite Aid, etc. because they have Chase ATMs in their stores.

    • Jen says:

      I absolutely buy less from Duane Reade now for the same reason. Before, I would just save up all the “little things” I needed so I could get them all in one trip at Duane Reade and get the points, but now that the rewards program is essentially useless (there’s no real rush to getting a $5 coupon every three months), I just pick them up whereever is most convenient.

      Plus, the only thing they give extra reward points for anymore is Duane Reade brand products, which aren’t really even cheaper than regular brands.

  11. backinpgh says:

    Our local grocery chain, Giant Eagle, recently announced that the FuelPerks you earn (I think it’s 10 cents off per gallon for every $50 you spend) will expire after 60 days, when I think you used to have 6 months to use them before. So I guess it’s happening everywhere.

    • Robert Nagel says:

      I live in Cleveland and Giant Eagle has had a 6 month retirement program for as long as I can remember. However, they do have some nice promotions. Double earnings for gift card purchases occasionally and $1.00 for a new prescription. We have a Ford van at work which will accept the entire 30 gallons allowed so this works out to as much as a 12% discount at times and 6% all the time.

  12. InsertPithyNicknameHere says:

    Borders/Waldenbooks used to have an excellent rewards program – for every $100 you spent, you got a certificate for $10. You had to pay for the program ($20, if I recall correctly), but in my case it paid for itself. The year they stopped that program, my purchases from them fell dramatically – I started shopping a lot more online and from used book sellers.

  13. coffeeculture says:

    It reminds me of the Black Knight in Monty Python, haha.

    I was about to say….didn’t DR get bought out by Wags? The whole thing will change around soon anyway.

  14. kerrington.steele says:

    Citibank’s ThankYou program used to be great — I’ve redeemed for European airfare and other items through the program and racked up points quickly by putting all my purchases on my Citi card. but about a year ago they raised the thresholds for purchasing most items (including airfare) to the point where my AmEx Blue Cash card is a much better way to earn rewards. so now I put all purchases on AmEx. I’m hoping to eventually get enough ThankYou points (from my checking account and the occasional credit purchase) to redeem for one final flight, but I’m sure they’ll cancel or change the program again before I get there.

    • COBBCITY says:

      I agree!

      I used to get 5 points for every dollar spent at gas stations, grocery stories or drug stores (5%) and racked up hundreds of dollars in rewards. Heck, I would by gift cards to other stores at grocery or drug stores because I would get 5% back if I did. To earn a $50 gift card to somewhere with my Thank You points each month was not unusual.

      When they slashed it to 1 point for everything, I shut down the account. I can do so much better elsewhere.

  15. Outrun1986 says:

    Most of these rewards programs are crap, you get a tiny amount of money back and you have to spend like $500 at their store. Yippie! I get a 10% coupon that is only valid on certain things after spending $500 at your store, yeah way to keep a customer….

    The cost of the rewards program is built into the prices that the store charges as well, so you really aren’t saving anything.

    As for me I don’t think I spend enough at any one retailer to make a rewards program work for me, since you have to spend $250 or $500 at one store just to get a measly reward. I prefer to shop at the retailer that has the lowest prices instead of relying on a rewards program for savings that are only perceived savings. The only way it would work is if the place you are buying from has the lowest price amongst competitors, and that is rarely the case.

    The grocery store rewards programs, which are ones that I might actually use, don’t give you anything useful back, its basically just a card so you can get discounts at the register. There is a store called Tops here that has a gas savings program, but their prices are significantly higher than the other grocery stores, so you are spending more just to get a small discount on one fillup of gasoline, also the price of their gas is higher than the competing station next door, negating any actual savings you might get.

  16. AllanG54 says:

    Duane Reade went bankrupt, Walgreen’s bought them out. So, it’s no wonder that certain programs have changed. Hell, Wal-Mart lets you buy drugs for $4 but in order to get those same drugs at Walgreen’s you have to join their “club” for $35/year.

    • COBBCITY says:

      Um, not what I am aware of and it’s my job to know these things.

      Duane Reade was sold to private capital companies twice (Bain Capital in 1992 and Oak Hill Capital Partners in 2004). It was Oak Hill Capital Partners that sold the chain to Walgreen’s for $623 million.

      Not aware of Duane Reade ever going bankrupt. They had a lot of debt with Walgreen’s bought them (which Walgreen’s assumed) but no bankruptcy.

  17. Alvis says:

    You can’t save money by shopping at a drug store.

  18. dg says:

    Rewards programs, in any form, are a con. Just buy what you need at the best price you can get and forgo the so-called bonuses. You’ll end up buying less, and only what you need so you’ll save plenty of money.