F1.5 Compare various ways for consumers to get more value for their money when spending, including taking advantage of sales and customer loyalty and incentive programs, and determine the best choice for different scenarios.
Skill: Comparing Different Loyalty and Incentive Programs
Several factors should be taken into account to make the best possible purchase. Many companies and businesses have developed loyalty systems and programs to encourage the consumer public to buy from them and even become regular customers.
Companies use various methods to build customer loyalty such as coupons, discounts, paid memberships with special privileges or bonuses reward programs.
These various programs and offers can increase the purchasing power of families. It is important to provide students with opportunities to justify their mathematical thinking by making connections between the business offering these types of programs and the items on sale. In the intermediate grades, students will solve problems based on real-life situations and prior knowledge and experience. Students will learn about discounts, loyalty programs, and paid programs that are often offered when purchasing products. Students will also make connections between these different programs and their impact on the purchasing power of people in various financial contexts. Students will develop criteria to determine the advantages and disadvantages of these types of programs, which will be useful in their daily lives.
Note that it will be important to relate the best buy to loyalty and discount programs. Students will learn about the importance of discounts and sales to businesses and make connections between inventory and sales to understand the establishment of discounts and programs.
The following is a list of questions that could be asked of intermediate school students to help them understand more about the different programs offered by companies.
- Why might a business decide to charge a membership fee so that a person can purchase items from it? Are there advantages and disadvantages to the customer?
- Why do businesses put some items on sale? Are there advantages and disadvantages for customers?
- Why can a business afford to offer coupons and discounts on different items?
- How can discounts help a family stay within their budget?
Knowledge: Discount
Whether it's the promise of free shipping or special sales like "Everything for a dollar" or "We pay the tax", businesses use discounts to lower the price of certain goods.
Knowledge: Incentive and Reward Programs
Some businesses offer points based on the amount of money spent. The purpose of these points is to encourage the consumer to shop at that business for rewards. For example, some grocery stores might offer 1 point for every dollar spent and then offer a $10 off coupon for every 1000 points earned. For other businesses, such as shoe stores, a family that buys five pairs of shoes in a year is offered the 6th pair at half price. These programs exist in small local businesses and in large national businesses, whether it's for coffee or appliances. These programs offer significant benefits when customers are satisfied with the service or product offered and want to avoid the hassle of comparing prices from multiple stores.
Knowledge: Discount Coupon
Following a visit to the Web site or after an online purchase, many companies offer the possibility to subscribe to a newsletter to receive promotions and special offers. These emails often offer coupons and encourage people to make a purchase. These marketing techniques influence decisions and can decrease purchasing power. People are sometimes inclined to buy items that are not very useful and that they might not have intended to buy in the first place.
In addition, many businesses, such as grocery stores, offer coupons in the weekly flyers encouraging people to shop there.
Knowledge: Paid Programs
Some companies offer a membership program with excellent discounts or savings, but a fee is charged. These programs, while financially beneficial in many cases, tend to create inequities based on who can meet the membership criteria. The purchasing power of the customer who has joined the program is high, but the person who cannot afford to pay a large sum of money at once will not have access to the best prices. These stores often offer bulk sales. The cost per item is lower, but the purchase of these products can create financial stress for a family who, for example, only wants one jar of mustard, but must buy a set of four.