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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