Shoppers Optimum points

[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.

[Giseledta]

Thank you for the information

[Justine]

Very informative thread, thank you! Keep it up.

[thecountess]

Thank you for the insight that only an insider can give.

I did not think there was anything inflammatory or troll-ish about your post at all. You are presenting another viewpoint and did so in a civilized way.

I can appreciate the plight of the franchisee... however SDM head office is taking a really hard-a**, militant approach which will hurt everyone in the long run. Whether it is for appearances sake to pacify their franchisees or not.... head offices' actions of late are going to translate into lost sales.

[EvilTofu]

Now I feel bad about using coupons on 20x events...

[cheapskate101]

i suspect you are refering to what happened to me?

[cheapskate101]

by the way this is a great post and i really appreciate the information thank you!

[thecountess]

i suspect you are refering to what happened to me?

Yep I was cheapskate

Any word back yet?

[thecountess]

Now I feel bad about using coupons on 20x events...

I don't.... and the reason is because for almost 20 years I paid full price for everything..... did not shop the flyers, rarely used a coupon, didn't stockpile, etc.

The grocery stores, the drugstores, the mass merchandisers (Walmart, Zellers) have already taken and enjoyed their pound of flesh from me. Over the last year and a half I have learned more and more about smart shopping and continue to learn new things all the time. Now that I know about couponing, stockpiling, etc, there's no going back.

The stores have all kinds of marketing tactics to trick us into buying items we don't need or to buy something thinking it's on sale when it isn't. (With signs over end-caps displays "GREAT DEAL!" and "WOW! WHAT SAVINGS!") I have been a store manager and I know the pressure the stores are under to get the customer to spend as much money at their store as possible.

Also, statistics show that only a small percentage of Canadians use coupons, therefore for every one of me with a handful of coupons there are hundreds of thousands of people who are like the old me, paying through the nose for everything.

[redfox]

thanks for the information,

[taraf_14]

appreciate the post! However, I had a complaint because a cashier would not honour the scop... I wrote to head office, VERRYY upset and they dished out 2500 points (whoopty doo right?) How can head office give me points, yet expect the storre manager to reemburse me..that makes no sense.. I love shoppers for points, but this shows that they are going the wrong way for buisness. Suck for them

[jbooth]

Very informative post! I knew about how the stores are individually franchised by the pharmacists as there was a store reopening a few months back and the grand opening flyer showed a picture of the owner/pharmacist. However, I didn't know that the store who makes the sale is the one who is paying for the points.

It does make sense now why Shoppers is so quick to give points to people who complain to head office about what happens in stores. It's not head office thats paying for the points, but rather the store who just gets charged for them.

[banansa]

Very insightful! I am very surprised about learning all that info about SDM points.

I hope the program stays strong and doesn't go down hill. It is by far the best rewards program out there without a doubt. (gather you take advantage of bonus poitns and 20x the point days)

ps: is there a thread I can get linked towards joining a group of people that will share emails for referals?

[Insane]

Thank you for that. That was actually kinda eye opening. (especially the part about the high ticket items on redemption days!)

[rhiannon1891]

This is an awesome post. Thanks so much for the information. I hope you will stick around SC!

I already suspected about the electronics on bonus redemption days. I called about holding a Wii the day before redemption, they said they would hold it, then when I went to pick it up they couldn't find it. When I kept pressing the issue she went in the back and mysteriously found it (I could see 3 of them in the back when she opened the door. The Wii fit also had a "out of stock" sign on it that day as well.

I understand now why the owners would be annoyed by the program, but I wouldn't shop there anymore without it.

I also suspect there are many many customers who don't even have a points card. I often see people saying no when the cashiers ask for the card. I know that I shopped there for about a year without a card (before I came to SC!!!) So they are still making $$$ from a lot of customers who don't shop sales/coupons/points etc.

Thanks again for your post! Just great!!!