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CVS backs off from a more customer-friendly rewards practice

Contrary to what the drugstore chain's marketing chief said last year, the firm isn't working to add Extra Bucks to consumers' ExtraCare cards, opting instead to keep them on those extra-long receipts.

July 22, 2011|David Lazarus
  • CVS gives customers 2% back on purchases every time they flash their rewards card at the cash register. Youll also earn one Extra Buck for every two prescriptions you fill. Above, a store in West Hollywood.
CVS gives customers 2% back on purchases every time they flash their rewards… (Mel Melcon, Los Angeles…)

When we last checked in with CVS, the drugstore giant acknowledged that its rewards program for customers wasn't working as intended and said a major fix was in the works.

Specifically, CVS' chief marketing officer, Rob Price, told me the company was planning to do away with the practice of including cash-back rewards on people's receipts, requiring you to schlep a yard-long slip of paper around with you until your next visit to the store.

Instead, Price said, CVS had "a militia of technical people" working on a system that would store cash-back rewards on people's ExtraCare cards, making it much more convenient for customers to enjoy the benefits of the loyalty program.

So a year has passed since that laudable news. And what do you know? I stopped by a CVS branch the other day and once again found my reward bucks printed on a yard-long receipt.

Was the company just blowing smoke when it pledged all those months ago that things were changing?

CVS now says I must have misunderstood Price when he said that "the receipt won't be the currency going forward" and that "the goal is to have the reward stored in the customer's card."

Helena Foulkes, who oversees marketing for CVS Caremark, the drugstore chain's parent company, told me the other day that CVS in fact isn't working on doing away with printing rewards on receipts and the goal isn't to store rewards in people's cards.

"When you give rewards, you want people to feel excited," she said. "You want them to know that they've earned the reward."

This sense of excitement, Foulkes said, is achieved by handing customers something tangible — in this case, a receipt with their "Extra Bucks" printed on it — and requiring them to hand the receipt back the next time they purchase something.

"This makes people 'feel the reward,' " she said.

That may be. But it also seems like a decidedly inconvenient way of rewarding loyal customers and a sure way of guaranteeing that relatively few people enjoy the benefits they're entitled to.

Au contraire, said Foulkes. She said CVS' data show that about half the 67 million customers enrolled in the Extra Bucks program happily carry around their receipts to redeem their rewards.

"That's a number we're really proud of," Foulkes said.

They should be, considering that the industry average for coupon redemption is closer to 3%.

All I know is that when I stopped by a CVS store in downtown Los Angeles, most of the dozen or so people I met said they seldom remembered to keep their receipts on hand.

"I never use it," said Koshawn Holt, 37, of South L.A. "The receipt always gets thrown away."

Not always. Compton resident Angie Stovall, 48, showed me how she diligently wraps her receipt around her CVS card so it's ready to go the next time she shops at the store.

But most others I spoke with said it's too much hassle keeping track of receipts when you might not return to CVS for weeks at a time. And every single person I met, including those who routinely kept their receipts, said it definitely would be more convenient if CVS would just store the rewards on their card.

CVS gives customers 2% back on purchases every time they flash their rewards card at the cash register. You'll also earn one Extra Buck for every two prescriptions you fill.

"We're constantly working to make the program better," CVS' Foulkes said.

Along these lines, she said the company would soon introduce a service enabling customers to go online and select coupons they desire. By entering the number of their rewards card, the coupons can be stored in their account, awaiting their next visit to a store.

That's good, as far as it goes, but it requires that customers be proactive in visiting the company's website before shopping and entering data to get discounts. And it does nothing to encourage use of Extra Bucks.

Foulkes' answer to that is a campaign CVS launched this month for customers to "stop money trashing." In other words, the company wants people to stop throwing away those reward-laden receipts and instead put them to use.

"We want people to get the most out of their Extra Bucks," Foulkes said.

If that's really true, here's the solution: Store Extra Bucks on people's cards. Instantly, CVS' redemption rate would soar to 100%.

What do you say? Would you prefer having reward cash stored on your plastic, or do you savor the excitement of carrying around your receipt? You can let CVS know by sending an email to extra@cvs.com. CC me as well and I'll let you know the results.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.

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