Select Committee on Home Affairs Written Evidence


APPENDIX 41

Memorandum submitted by Tesco

1.  ABOUT TESCO

  1.1  Tesco is one of the world's leading international retailers, employing over 450,000 people around the world. Our aim is to deliver a consistently strong customer offer on every visit and every transaction, in order to create value for customers to earn their lifetime loyalty.

  1.2  We achieve this aim through two Tesco values; no one tries harder for customers, and treat people how we like to be treated.

  1.3  Our customers have told us that trust is important to them; they trust us because they understand our values. In order to maintain this trust, it is important to ensure we are as open as possible. We try to apply the same principles of openness and honesty to our relations with all our stakeholders.

  1.4  In order for Clubcard to be popular with customers and useful to us, it is paramount to maintain trust at all stages. Therefore, there is a strong commercial incentive for us to ensure that the privacy of our customer information is maintained at all times.

2.  UNDERSTANDING CLUBCARD

  2.1  Tesco Clubcard enables us to thank our customers for shopping with us. It is a world-leading loyalty programme which allows us to better understand what our customers want and is an integral part of how we run our business as it helps us to listen to our customers and try and respond to their changing needs. Customers can collect an application form in-store, and register by freepost, by telephone or online.

  2.2  Analysis of all Tesco Clubcard data is managed by Dunnhumby, a specialised provider of database management and analytical services. Tesco is the majority shareholder in Dunnhumby and controls all Clubcard data held by them. All personal information received by Dunnhumby is kept in a secure manner and processed in accordance with the laws relating to data protection.

  2.3  In its role as our "data agency", Dunnhumby manage our requests for Clubcard data. This enables them to provide us with information on customer groupings for a specific campaign or project as well as enabling us to collate information in a manner that enhances our understanding of customer behaviour by segmentation or spend levels.

  2.4  At no stage do we ask Dunnhumby to analyse information on individuals. This information is only accessed at the request of the Home Office or the individual customer.

  2.5  Tesco is extremely proud of its Clubcard loyalty scheme, which rewards customers for continuing to shop with us. It enables consumers to get more from their shopping experience at Tesco by providing points that can be redeemed in-store or with a number of our partners.

  2.6  The Clubcard scheme also enables us to utilise customer information to understand customer habits and improve the service that we can offer.

  2.7  Every time that a Clubcard holder makes a purchase of over £1 in a Tesco store, online at Tesco.com, or on Tesco petrol, they can receive points on their purchase. In addition, points can also be collected by paying with a Tesco credit card, or paying for a Tesco mobile phone, a Tesco home phone, Tesco broadband at Tesco.net, on selected Tesco Personal Finance products and through Clubcard issuing partners such as Powergen and Avis.

  2.8  For every £1 that is spent, customers usually receive one point. In certain circumstances, such as when allocating "green" points, we award two points for every £1 spent, and we also offer triple promotions on specific products.

  2.9  At the end of every quarter, a Clubcard statement is sent out to all customers providing them vouchers reflective of the number of points they have collected and for other Tesco offers. One point is worth one penny, and vouchers will be sent out to all people that have collected over 150 points.

  2.10  Points redeemed in-store are worth their cash value, meaning that £2.50 worth of points can be redeemed for £2.50 in money-off vouchers for Tesco stores.

  2.11  Alternatively, Clubcard points can be redeemed against a range of products offered by our partners. Through our partners Clubcard points can be worth four times their in-store value. Our most popular deals are days out at attractions such as Alton Towers and Legoland, and we are now partnering up with theme parks in France and Germany.

  2.12  Each Clubcard has its own unique 12 digit alphanumeric code to enable customers to log-in online where they can access their information and special offers.

  2.13  Clubcard members are also able to join any of our clubs for free, including the Food Club, the Wine Club, the Baby and Toddler Club, and the Healthy Living Club. Members of these clubs receive a complimentary magazine relating to their chosen club, and a range of other benefits including money off vouchers and, in the case of the Baby and Toddler Club members, a free permit to park nearer to the front of the store.

  2.14  In February 2007, we launched a partnership with the Open University so customers can now use their Clubcard vouchers to fund their learning, from a beginners course in writing family history to a humanities degree.

  2.15  Last year nearly one million new customers signed up to Tesco Clubcard, and we gave away over £340 million in Clubcard vouchers to thank our customers for shopping with us.

3.  GREEN CLUBCARD

  3.1  We have recently begun to use Clubcard as a tool to encourage and reward green behaviour.

  3.2  In August 2006, Tesco became the first supermarket in the UK to financially reward people for not using carrier bags. This means that customers receive a point for every Tesco bag that they do not use—and we do not restrict them to re-using our bags; shoppers can bring along carrier bags from any other retailer and still receive their points reward.

  3.3  When Clubcard customers receive the quarterly statement, their total points tally includes a separate column dedicated to the number of "green" points collected. These are redeemable in exactly the same way as all other Clubcard points.

  3.4  So far the bag reuse scheme has helped us save over 500 million carrier bags over the last six months.

  3.5  Following the success of green Clubcard points in reducing carrier bag use, we have also tried to use it in other areas. For an eight week period, starting on 15 February, we gave away double green Clubcard points on products in our green and organic ranges, such as organic fruit and vegetables, energy efficient light bulbs and environment-friendly brands like Tesco Naturally and Ecover.

  3.6  We also now offer Clubcard customers the chance to earn up to 500 points by recycling old mobile phones and printer ink cartridges. In return for recycling a mobile phone that will turn on, Clubcard customers will receive 500 green Clubcard points, or can choose for Tesco to donate £5 to the British Red Cross. For a mobile phone that does not turn on, or for a recycled ink cartridge, customers can receive 100 points or a £1 donation to the British Red Cross.

4.  CUSTOMER CHARTER

  4.1  Tesco recognises the importance of customer privacy and as such has created the "Customer Charter" to explain exactly what we do with stored information.

  4.2  Personal details held by Tesco are never released to organisations outside of Tesco for their marketing purposes.

  4.3  Customer details are used to send offers and discounts on products that we believe may be of interest to them. For instance, should a customer choose to tell us that they are a vegetarian, we will ensure that they only receive offers for non-meat products.

  4.4  For those customers who tell us that they would rather not receive offers and other information, we only send a Clubcard statement every quarter. In addition, if a customer chooses not to be contacted for research, we promise them that they will not be bothered by us.

  4.5  Should any customer wish to stop receiving our mailings and offers, all they have to do is to contact us to inform us of their decision.

5.  DATA PROTECTION

  5.1  Tesco has a clear "Data Protection Statement" in order to inform Clubcard customers of what we wish to use their information for.

  5.2  This statement outlines our desire to utilise customer information to improve the Clubcard system and to understand customer habits in order to improve the service that we can offer.

  5.3  At the point of sign up, customers choose from clear marketing options on the application form. Tesco does not contact those people who choose to opt out of receiving correspondence from us. Customers choose separately whether or not they wish to receive Tesco marketing material, third party marketing material and market research. All customers receive a quarterly points statement.

  5.4  We comply with the terms of the Data Protection Act (1998) and all other relevant legislation and guidelines.

June 2007





 
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