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Loyalty Cards as a Way to Drive Sales


ver the many years that we at Pharmacy Healthcare Solutions Inc. (PHSI) have contributed to the Viewpoints column, we have written about the need for pharmacies to leverage technology as a way to reduce operating expenses to counter reductions in prescription reimbursement. Integration of the pharmacy management system with other systems, such as robotic technology and point of sale (POS), have decreased operating expenses for chains and independent pharmacies. In the May/June 2012 ComputerTalk cover story, “Point of Sale and Managing the Pharmacy,” we could see how today’s POS systems are powerful tools for gaining control of a pharmacy’s business. One feature of the POS system noted in the article was the ability to track a pharmacy’s inventory for controlling expenses. However, your POS system can also track your customer’s purchases, which could help you increase revenue.

Where They Started Over 10 years ago, supermarket chains

introduced loyalty card programs. These programs were sometimes called frequent-buyer programs, akin to the frequent-flier programs used by the airlines to build customer loyalty. The chains asked the customer to enroll in the program and gave the customer a card to be scanned at the POS system during checkout. The chains tracked customer purchases and used that data to create special offers for customers in the form of coupons or a reward such as a percentage off the next purchase. The rewards evolved into discounts at the gas pump at participating stations or free turkeys at Thanksgiving. Eventually, large pharmacy chains entered the loyalty card arena. An independent or small chain pharmacy may think creating a loyalty card program is a daunting task requiring too many resources. However, 42


David Schuetz, R.Ph.

Ann Johnson, Pharm.D.

retailers using a POS system may already have access to the tools needed to implement a loyalty card program. Implementing such a program can provide pharmacies with an easy way to increase sales by using different tactics to both attract and retain customers. While some loyalty cards simply provide a discount to the customer using the card or the chance to accrue points toward future purchases, other programs offer more complex strategies for driving sales. Some companies use the cards as a way to generate coupons, create invitations for member-only sales, introduce new products or services, or arrange contests with prize incentives for customer participation.

Card Strategies The intent of loyalty cards is to create financial incentives for card members, with the expectation that they will increase their spending in the pharmacy. Pharmacies can provide these incentives in one of two ways. First, they may use a system in which members gain points for every dollar spent. For example, a pharmacy customer may earn one point for every dollar spent in the store, where each point has a value of one cent. Customers may need to reach a certain point