Originally Posted by
BrutallyHonest
I know there have been some discussions on the board about optimum points. As a (former) Shoppers insider, maybe I can shed some light on what has been happening.
Shoppers Drug Mart franchises their locations, so each actual store is owned by one person (a pharmacist). The pharmacist (Associate) pays an upfront free to have their own Shopppers store and continues to pay the company a percent of their sales. They must participate in all promos- flyers, sale prices, and Optimum points – no choice.
Meetings between Head Office and Shoppers store owners happen about 1-2 times per year, in huge conferences. Since Optimum began, store owners have made huge stinks about the Optimum program and the costs to the store. The reason is that the store, not the corporation, pays out the value in points. So if you spent $50 on a 20X point day, Shoppers Head Office makes a commission on that $50 sale, but the store owner must pay out 10,000 points (50 X 10=500 points, X20 = 10,000; about $21) into your Optimum account. (The store that makes the sale pays out the points value, not the store you redeem at. ) So the owners’ $50 sale just became $29, and he/she still needs to pay Shopppers’ commission on the full $50. Additionally, they have to pay regardless of what you purchased – most items on page 1 of the flyers are below their cost, so they are already losing money on the sale, even before paying out Head Office and your points.
According to what I have been told, the average store owner pays out about $300,000/year in points. Bigger stores claim to pay out more than $1,000,000 per year in points, and, as crazy as that sounds, it only takes $10 million in sales at regular earnings (10 points for every dollar), which is average for a larger Shoppers store in Toronto, and that doesn’t even take into account 20X point days, all their operating expenses (inlcuding staff), their Shoppers HO fees, or how much of that $10,000,000 sold was at a profit or loss. (This is why so many stores mysteriously are out-of-stock on Nintendos and other high ticket items on bonus days – the markup on the device is so low (on electronics at Shoppers, it is usually very low), and paying out 20X the points on that makes a steep loss to the owner. So some Associates intentionally leave it off the floor (against Head Office rules- of course, Head Office wants you to buy it so they can earn the commission on the sale, and HO isn’t paying out points to anyone.) If they simply don’t reorder the item – well, that’s also against the rules, and Shoppers can see if they have none in stock (but don’t bother calling and asking them to check for you).
And they don't say “Oh, well, we make lots of money otherwise, so it is OK”. They are really upset about it and keep pushing Head Office to roll back the program. So, lately, HO is trying to support the store owners by picking on a few people who earned lots of points to make it look like they care about the owners’ losses. Shoppers HO is usually very helpful customer service-wise, but since the store owners have been pushing for more control on the points program, HO has taken a less customer friendly approach.
And just to be clear – there is nothing inflammatory or rude about my post. I am not taking anyone’s side in any issue, nor am I suggesting one person is wrong and another is right.I am just sharing information based on my (former) position in an effort to help posters who don’t understand what is happening how the decisions are being made. In fact, taking away one woman's points is so unbelievably petty and small I am grateful I left that job with no new job in sight, just to have gotten away from that environment. Shoppers spends more on coffee stir-sticks than the value of the points they took away, and who benefits? Nobody, because HO did absolutely did not reimburse the store owners for all those points they paid out, though they did keep the commission the store paid on the sales. .I don’t work there anymore so I can’t comment on what has changed (if anything). But, I suspect, this is a sign of things to come for Shoppers.
