CVS Launches A Loyalty Card Program For Shopping Bags

Many retail chains today incentivize customers to use their own reusable shopping bags, often giving the customers immediate cash back for every bag used. But the $88 billion 7,000-store CVS pharmacy chain opted for a slightly more complicated approach, issuing special bag loyalty cards to customers who would attach them to each bag they planned to use. The bag barcode loyalty cards aren't even being given away; customers need to pay 99 cents for each tag.

In the world of green retail strategy, CVS' non-traditional approach may prove quite wise. Its strategy is that the chain needs consumers to support and participate in the program, and truly accomplishing that goal means customers must, if you will, have some organic biodegradable skin in the game.

"What we've learned is that getting customers to mentally buy into the program is critical," said Melissa Studzinski, the director of relationship marketing for CVS. By making customers pay almost a buck for each tag, "you're forcing them to understand and to opt into a behavior."

But why manufacture and design a separate loyalty card just for bags, when it could be done just as easily by hitting one key on the POS and tying it into an existing CRM loyalty card? "It's really not that difficult. Scanning one more item isn't a big deal," Studzinski said.

For customers who use the program, the 99 cents is sort of a deposit, as the customer will earn a $1 Extra Care Buck for each tag, pretty much reimbursing them for the 99 cents they initially paid. But it's a little trickier than getting cash back right away or even after each use. That $1 Extra Care Buck is only awarded after you use the tag four times and then only after each fourth use. Studzinski argued that the delayed gratification is something that helps customers accept the bags more easily.

"Instead of automatically giving stuff to people, we're delaying that reward until after their fourth trip," she said. "It's changing their behavior as a result" by incentivizing multiple uses of the bag, until it becomes a habit.

The program is called the GreenBagTag, the bag loyalty cards are shaped like a leaf and—you just knew this was coming--a CVS statement said they are "made with 100 percent green corn-based materials." GreenBagTags have been rolled out in stages and on Monday (Oct. 28), the program went chainwide.