Investigating Customer Perceptions of Loyalty Cards and their Influence on Purchasing Behaviour in Major Retail Stores

Christine Kasai; X D Chauke

Christine Kasai Mancosa Graduate School of Business, 16 Samora Machel St, Durban
X D Chauke Mancosa Graduate School of Business, 16 Samora Machel St, Durban

Keywords: loyalty cards, retail outlets, purchasing power

Abstract

Loyalty cards are used in various sectors in South Africa. Media reports indicate that there has been a significant growth in the number of loyalty card programmes in the country. The existence of various loyalty card programmes generated an inquisitive interest for this research study to be conducted in order to determine customer perceptions of loyalty cards in retail stores in Gauteng. Like in other industries, retailers are competing on their loyalty card programmes as they aim to acquire loyal customers. This is not an easy task, particularly in the environment of economic decline and uncertainty which South Africa is currently going through. The debate on whether loyalty cards have an impact on customer purchasing behaviour has been ongoing for several years. There have been different views from previous research studies in both developing and developed countries. However, this topic is relevant as it relates to understanding and fulfilling customer preferences. The purpose of the study was to investigate if customers perceive loyalty cards offered in major retail stores in Gauteng to be beneficial, and to determine if they influence the purchasing behaviour and decisions made by customers. The study also intended to understand the reasons for various loyalty card memberships. The quantitative approach was employed in this study, and structured questionnaires were used to collect data. The results indicated that loyalty cards influence purchasing behaviour as the number of times customers purchased in stores as members increased, however there was uncertainty if the amount of money spent also increased.

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