Something odd caught my eye as I leafed through the weekend Best Buy
Reward Zone began a couple of years ago with a simple premise. For $9.99 a year, customers receive a card that they present when making a store purchase. Every buck spent then translates into 100 points. When a customer reaches 15,000 points, the equivalent of a $150 shopping spree, a $5 in-store gift certificate is issued. Making it a sweeter deal is that many of the initial members were comped when the program was launched a little more than two years ago.
What does Best Buy get out of this? Information, of course. The more that Best Buy knows about you, the more effective it can be in marketing future promotions your way. Best Buy has promoted special offers to its members in the past, but this is the first time I have seen a public pricing hierarchy on small-ticket items as a way to inspire registrations.
It's not a new practice in retail. Many grocers and drugstores, such as CVS
Making this public move may be brilliant for Best Buy if it inspires new Reward Zone memberships, or it can backfire horribly if consumers shun the chain given the pricing hierarchy. I know that when CVS acquired the Eckerd chain, my initial reluctance to register for the loyalty card just had me avoiding CVS altogether.
So this is a bold move for Best Buy, a nearly two-year old Motley Fool Stock Advisor newsletter recommendation. It comes at a time when the chain and its Reward Zone program have a featured role in the new McDonald's
Costco is also a Stock Advisor recommendation.
Longtime Fool contributor Rick Munarriz enjoys shopping at Best Buy, and he's been a Reward Zone member since the program's launch. He doesn't own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.