At the end of January, GAME changed its terms and conditions so that you now have to spend twice as much to earn the same number of points on your Reward Card. Previously, you’d get a reward point for every 0.125p you spent – but now you get a point for every 0.25p you spend. You need 400 points to get £1 off a purchase, so whereas before you’d need to spend £50 to get a pound off, now you need to spend £100.
I contacted GAME to ask about these changes to the reward scheme and the reasoning behind them, and the company provided the following statement:
“How customers enjoy & redeem their points in store & online doesn’t change. This change is due to wanting to have more points based events, campaigns and the opportunity to earn more points on specific products throughout the year, in order to deliver that we have made this adjustment. Our newly launched GAME Elite subscription based loyalty programme will not be affected by these changes and continues to give customers up to 10% points back with their purchases.”
This says that, contrary to previous reports, the change does not affect the £36-a-year Elite Reward Card scheme. It also emphasises that the reward points you’ve accrued already won’t suddenly halve in value.
So what’s going on here?
Appeal to the loyal
The most obvious takeaway is that reducing the point-earning rate for free Reward Cards is a way to drive customers towards upgrading to a paid Elite Reward Card. The free Reward Card essentially gives you 1% back in points – so £1 off per £100 spent – down from its previous 2%. The Elite card, however, gives you 10% back on physical games, merchandise and accessories, 4% back on hardware and 2% back on trade-ins and digital games.
But even at the rate of 10%, you’d still have to spend a decent chunk of money to break even on the £36-a-year asking price for Elite membership. £360, to be precise. That said, the scheme also offers ‘member exclusive’ discounts and deals: for example, at the time of writing, Elite card holders are being offered a £10 gift card when they spend £100 or more on preowned consoles. GAME also point out that if you don’t spend enough each year to get back the £36 cost of the Elite card, they will give you the difference in points. So if you only earn £10 in points one year, for example, the scheme will give you £26 in points.
Let’s just pause for a moment here to address the elephant in the room. We know from the phenomenal response to the article ‘Why Does Everyone Hate GAME?’ that there’s a lot of ill-feeling towards the high street chain. Many of you may be thinking “There’s no way I’m spending £36 on a loyalty card, I’m done with that company”. And if you stopped shopping at GAME a while back for whatever reason, it’s unlikely that a pricey loyalty scheme is going to persuade you to go back.
But then again, it’s clear that the loyalty scheme isn’t aimed at you. Studies suggest that it costs retailers five to ten times more to acquire a new customer than to retain a current one – so it makes sense to focus on existing customers and encourage them to spend more. And a paid loyalty scheme is more likely to keep an existing customer coming back to your store, because they already have an investment in it.
That said, who still shops at GAME? And just how good a deal, following these changes, is GAME’s loyalty card?
The Reward Card under the microscope
GAME is no stranger to paid-for loyalty schemes. It launched the Reward Card back in 1997, and initially charged customers £2 a pop to sign up to it, with the argument that it offered a better rate of return than other, free loyalty cards. But when the company emerged from its brief period in administration in 2012, one of its first moves was to make Reward Cards free.
So how does the new rate of 1 point per 0.25p spent measure up with other loyalty schemes on the market? Here’s a quick breakdown:
*Note that this example is only for spending in-store or online at Sainsbury’s – the rate of earning points is different at different retailers that are part of the Nectar Card scheme.
It’s notable that GAME is not the first retailer to slash the value of its free loyalty scheme. Sainsbury’s cut the number of Nectar points earned per £1 spent in half in 2015, claiming at the time that customers would earn more bonus points instead through "more personalised points offers and bonus events throughout the year." GAME gave a similar response when challenged about the recent changes to the Reward Card scheme:
“Our customers and community have told us they want to have more points-based events, campaigns and the opportunity to earn more points on specific products throughout the year, so in addition to savings in store and online, our customers will have greater opportunities to earn and redeem points. Our customers and community can already earn and redeem their points in our Belong Arenas for instance.”
But are any of these schemes actually worth it?
Value for money
At the end of the day, loyalty cards only make sense if you were going to shop at the store anyway. If you shop at Sainsbury’s because you happen to like that supermarket, it makes sense to use a Nectar card (providing you’re not bothered about sharing data on your spending habits with the company). Even though the Nectar card has a fairly measly rate of return, you’re still getting something back instead of nothing – and you would have spent that cash regardless.
Likewise, if you were going to shop at GAME anyway – perhaps because there happens to be a store near you and you like going to the shop – then it makes sense to use a Reward Card and get something back, even if it’s less than before. It might even make sense to get an Elite card if you shop there a lot.
But. BUT. The problem is that food shopping is nothing like buying a new game. For a start, how many games do you buy a year? I’d wager it’s unlikely to be more than one or two a month. Then there’s the fact that – barring certain pre-order exclusives and collector’s editions – games are exactly the same wherever you buy them from. So whereas you might shop at, say, Asda because you prefer their pizzas, you don’t buy from a particular game retailer because you like their brand of games.
Which brings us back to value proposition. The fact is that the number one motivation for consumers is price, followed by value for money, quality and convenience, with ethical considerations trailing a long way behind. And price is something that GAME always struggles to compete on, particularly with often heavy discounting from internet retailers and supermarkets. For example, here’s a sample of prices for the UK’s current number-one game, Monster Hunter World, on PS4 at the time of writing:
- Amazon (online) – £43.99
- Argos (in store and online) – £43.99
- Tesco (online) – £44.00
- Simply Games (online) – £44.85
- GAME (in store and online) – £46.99
- Sainsbury’s (in store and online) – £46.99
- ShopTo (online) – £47.86
- Grainger Games (online) – £48.99
- Grainger Games (in store) – £49.00
- HMV (in store) – £49.99
So in this case, GAME is not the most expensive – but it’s also far from the cheapest, too. The caveat here, of course, is that if you want to trade in your old games, you might still prefer to head to GAME rather than, say, buy MHW from Tesco for a few pounds less.
Deal or no deal?
GAME’s strategy of reducing the rate at which buyers earn Reward Card points is aimed at driving already loyal customers towards signing up to the Elite programme, thus guaranteeing the company a yearly subscription income. And as noted above, encouraging already loyal customers to spend more is more cost-effective than recruiting new customers.
But reducing loyalty points also takes away from the value proposition for more casual consumers. If you know you’re only getting 50p back in points from buying a £50 game, why wouldn’t you buy it for £49 from the shop down the road? Or even better, order it for even less online, without having to leave your house?
GAME is trying to attract consumers back into its shops with its Belong gaming arenas, giving people a reason to come into a store rather than order online. But price will always be the biggest motivation for shoppers – and disaffected gamers who have drifted away from GAME’s stores are unlikely to be encouraged back by news that Reward Cards give them even less than they did before.
Let’s face it. Even if your carrot is “more points on specific products throughout the year,” changing the rules so shoppers have to spend twice as much to get the same amount of loyalty points isn’t going to go down well. The company can frame it however it likes. But from the perspective of the games-buying public these changes are, typically for GAME, a pretty bad deal.