Finance Your Budget Woolworths bagged over new rewards program
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Woolworths bagged over new rewards program

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Australia’s second-biggest supermarket has been slammed by customers for cutting Qantas flights from its Everyday Rewards program and replacing them with discount vouchers on shopping.

Following the changes, customers will no longer earn frequent flyer points when they shop. They will instead accrue “dollars” which can later be deducted from the cost of a trip to the supermarket.

The rewards “dollars” will only be available on specially-marked products, with each holding a different deduction value, according to Fairfax Media.

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Despite the savings, Woolworths claimed it was giving customers exactly want they wanted – a cheaper grocery basket. 

But for many, the loss of flights has removed the main reason for being a loyal customer, and the Woolworths Facebook page was deluged with outraged comments from shoppers about the decision.

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Scores of customers said they wouldn’t shop at Woolworths anymore because of the new scheme, with many saying the Qantas rewards program was the primary reason they preferred the supermarket.

Perth shopper ‘Adam Rooboy Debrincat’ claimed he would need to spend $900 to earn a $10 discount. Others questioned why customers were not given the choice of points towards a flight or discounts on groceries.

Many, like Matthew Hoare, went into detail about why they opposed the decision:

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Woolworths’ supermarket and liquor boss Brad Banducci said the changes were made to reflect what customers cared about the most.

“There was an absolute commitment to look at the business through the eyes of our customers and make decisions that benefited them,” Mr Banducci said.

“What our customers have told us is what they really value is the price of their basket of goods and … they really valued cash backs.

“It’s a very simple program, which is part of our desire for simplicity and clarity in the way we communicate.”

Woolworths told Fairfax Media it was continuing discussions with Qantas about working together in the future, but would not reveal in what capacity.

It has been reported the frequent flyer deal with Qantas was expensive, up to $80 million a year, because Woolworths had to pay the airline up front for each point given to shoppers.

While the feedback on social media was overwhelmingly negative, not all customers were opposed to the decision.

Shopper Delwyn Oliver said she preferred discounts on her groceries to frequent flyer points “which take ages to accumulate”.

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When Woolworths looks across at its biggest rival Coles, things don’t read much better than the social media reaction.

Last week, Coles announced a deal with Etihad Airways for its FlyBuys members.

Woolworths’ first quarter sales results will be announced on Thursday, and Deutsche Bank is forecasting a 0.5 per cent drop in comparable food and liquor sales.

All the while, Coles reported a 3.6 per cent rise in such sales for June, July and August.

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