This week, I read an article on the Globe and Mail website that had me shaking my head. Essentially, there’s a new trend among retailers to charge clients a membership fee to shop in their store. My first thought was WTF?!?!!
It seems that Costco’s membership model is a bit too seductive for regular retailers to resist. Full disclosure – I pay the annual membership fee to shop at Costco. I love Costco! As a Singleton, I can buy many toiletries there and they will last me for months. Big shops at Costco for non-perishables results in far fewer shopping trips for me, and that’s always a good thing. I have no problem with Costco since they offer so many products for a wide variety of needs and their return policy can’t be beat.
However, when I hear about paying $128 per year to shop at a yoga pant store, I have to shake my head. How many yoga pants does on person need? According to the article, paying the membership means that you will get “advanced notice of sales and exclusive events.”
When I hear this, what I’m really hearing is “Pay us $128 so that we can tell you when to come into our stores to give us even more money.”
According to the article, the number-crunchers have discovered that the people who have memberships to particular retailers spend a lot more money in those establishments than those without memberships. That stands to reason. If you’re going to pay to shop at a particular store, then you’re going to shop at that store in order to “get your money’s worth out of your membership.”
But here’s the kicker. The shoppers without a membership spent less than half of the shoppers with a membership. So if you don’t have a membership, then you’re less likely to shop in the first place. That means you’re more likely to keep more of your own money in your pocket.
Is that really such a bad thing? I know that retailers would say “YES! It’s a horrible thing! Shut up, Blue Lobster!!!”
However, this blog is targeted towards people – not towards retailers. I use this platform as a method to encourage people to think about their best financial lives and how to achieve their personal goals with their money. I’m sure that for some people out there, money literally burns a hole in their pocket. However, most people who peruse the personal financial space are looking for ways to minimize their expenditures while still maximizing the enjoyment they receive from every penny spent.
Right now, loyalty fees for shopping at one particular store make no sense to me. Instead, I will be aware of how I spend my money each day. And should I need a pair of $100+ yoga pants, I will walk into the store without a membership and plunk down my cash. Will I pay more for that one pair of yoga pants than the person who gets 10% off for having a membership? Maybe… but I sure as hell won’t be buying $1280 worth of yoga pants each year in order to recoup a membership fee through my purchases!