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Columnist Says CVS Missing an Opportunity in Prepaid Cards

By Mercator Advisory Group
August 15, 2011
in Analysts Coverage
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Los Angeles Times columnist David Lazarus recently asked his readers whether they liked receiving customer loyalty rewards from drug store chain CVS on their receipts. According to the e-mails he received, an overwhelming majority said they would like the rewards loaded onto their cards.

Apparently it’s about time someone asked CVS customers what they thought of the drugstore chain’s cash-back rewards program, which requires people to schlep around their receipt until their next visit to the store.

Turns out an overwhelming majority of CVS customers want to do away with the receipts and instead have their rewards automatically stored on their CVS cards.

He writes that CVS does not seem interested in offering rewards on prepaid cards.

Erin Pensa, a CVS spokeswoman, suggested that the hundreds of readers who took the time to email the company aren’t representative of all CVS cardholders. A silent majority apparently exists that relishes the excitement of carrying around their receipts.

Lazarus attributes CVS’s unwillingness to alter its rewards program format to a desire to keep people from redeeming their rewards as a way of controlling expenses. It is true that companies can adjust the difficulty of earning rewards and redeeming rebates. As Lazarus points out, a loyalty program that never delivers can cause customers to view it as a sucker’s bet and decide to abandon the program and its sponsor altogether.

Click here to read more.

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