Which? isn't sure.  Last week it published an article about retailers' loyalty pricing practices and questioned if the Chartered Trading Standards Institute pricing practices guidance needs to be updated to reflect how it applies to loyalty pricing.

Which? is particularly concerned about the “two-tier” pricing, whereby you can buy a product for what appears to be a considerable discount to the “normal” selling price if you have the retailer's loyalty card or app.  It has already raised concerns about loyalty pricing: several loyalty cards have restrictions and penalise those of a certain age or those without a registered address.

In its most recent article, it questions if the loyalty prices are genuine. If the non-member price has not been in place very long, or is much higher than the price at other shops - an issue Which? found evidence of during its investigation - the discounts may not actually be as good as they appear.

Examples included a sun cream being £8 for non-members, £6 for members. However, it had only been £8 for 14 days. Before that it was £6.  Another example was chicken nuggets costing £5.50 for non-members  and £4 for members at one supermarket but being charged at £5.25 and £4 for everyone at two other supermarkets on the same day.

Since January 2024 the CMA has been reviewing loyalty pricing in the groceries sector.  A key focus has been to what extent loyalty pricing could mislead shoppers.

The CMA considered if there are pricing practices that indicate that the non-loyalty (or non-member) price may have been artificially inflated to make the loyalty price appear misleadingly attractive.  It said in July that its results to date suggested that it was unlikely to identify widespread evidence of loyalty promotions that mislead shoppers in this way.

It said that it had seen retailers alternating between ‘was/now’ promotions available to all shoppers and loyalty price promotions. This raises questions as to what the ‘regular’ price is for the product and if the claimed saving for the ‘was /now’ promotion is genuine. The CMA is looking further into this issue.

It is also comparing a sample of supermarkets’ loyalty prices to those prices charged by other supermarkets at the same time. In addition, it is surveying consumers to understand:

• whether loyalty pricing is affecting shoppers’ engagement with supermarket loyalty schemes;
• if shoppers trust that the price savings for members are genuine;
• whether shoppers have concerns about supermarkets’ use of their personal data;
• whether attitudes to loyalty pricing vary between different types of shoppers, and if so how.

The CMA intends to publish its findings in November 2024. It will also provide the CMA's views on how retailers can stay on the right side of consumer law when offering loyalty price promotions, and when offering was/now promotions in close proximity to a loyalty price promotion.

The CTSI has welcomed the Which? report and  responded to say that it is considering reviewing its guidance.

With the Digital Markets, Competition and Consumers Act 2024 coming into force in the next year or so, the CMA will have greater enforcement powers and if you trade with consumers, you should be reviewing your pricing practices to make sure that you are complying with the law.