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Changes in the Borders Rewards program

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Changes in the Borders Rewards program

Old 03-27-07, 06:59 AM
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Changes in the Borders Rewards program

I just recieved an email that explains the new changes in the Borders Rewards program and I believe that they are not for the better at all.

Changes are:

- Holiday Rewards Savings can be used from April 12, 2007 until January 2008.
- The Holidays Rewards program and the personal shopping day will be phased out. (no more additional 10% off)
- Borders is introducing Borders Bucks, where the member recieves $5 in Borders Bucks after spending $150 on qualifying purchases at Borders. The Border Bucks will be issued the first week of the next month after the purchase and they expire at the end of the month that is issued.
- Weekly coupons and savings will continue to be issued via email.

They state in the email that members needed to spend at least $200 dollars to be eligible for the Holiday rewards program, but I don't remember that being true at all.

The link to changes is here:
https://www.bordersrewards.com/ProgramInformation.aspx

My 2 cents: So now the Borders Rewards membership offers no rewards at all. It is ridiculous that they give you only $5.00 after you spend $150. Not event the Replay Rewards from Suncoast was so cheapskate. The only "reward" is the weekly coupons. What a joke. Really, is Borders trying to drive away their customers? Their prices are ridiculous and their only incentive to shop at the store is being taken away.
Old 03-27-07, 07:03 AM
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So now instead of getting a buck for every $20 I spend, I have to wait until I get $150 and I have to spend it within a month.

F'n stupid.

If you hate the change, be sure to call Borders and voice your displeasure.
Old 03-27-07, 07:06 AM
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It wasn't much of a rewards program to begin with, if you ask me. You can't even use the Rewards Card for online purchases.
Old 03-27-07, 08:02 AM
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When they were kicking out 30% off coupons on a regular basis, it was a pretty damn good program.
Old 03-27-07, 08:07 AM
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Originally Posted by Shannon Nutt
It wasn't much of a rewards program to begin with, if you ask me. You can't even use the Rewards Card for online purchases.
That is mainly b/c Borders does not have it's own website for shopping. The one that currently has their name is leased out to and run by Amazon.

I have heard this will change within the next year, though.
Old 03-27-07, 12:02 PM
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Borders Shelving Amazon Alliance

When Borders needed a high-powered and efficient Web-based delivery service six years ago, the book giant courted Seattle's Amazon.com.

But now the marriage has ended, and it could put a crimp on Amazon's revenue and earnings, one analyst says.

The Ann Arbor, Mich.-based Borders Group Inc. said Thursday that it was severing ties with Amazon and will compete directly early next year against the Internet retail company, which has gone from selling only books to a wide range of products, from DVDs to clothing to food.

"We expect to drive sales and profits with it," Borders spokeswoman Anne Roman said of the company's planned Web site.

"We can mesh the in-store sales with online, which is something we have been missing."

Roman said the Web site would allow Borders to connect with 17 million customers who are part of the company's rewards loyalty program. Roman declined to disclose if its contract with Amazon had ended.

Patty Smith, an Amazon spokeswoman, said the company had no comment.

Before 2001, Borders had its own Internet business, but it wasn't profitable, Roman said. That led to the arrangement with Amazon, which operated Borders' Web site, took orders and delivered books.

Amazon obtained all the sales and gave an undisclosed cut to Borders, Roman said. Amazon also runs the Web sites for Target and Bebe and fills the orders.


The loss of Borders could cost Amazon $80 million to $160 million in annual revenue, according to an estimate by Scott Devitt, an analyst with St. Louis-based Stifel, Nicolaus & Co. Amazon and Borders wouldn't confirm or deny those figures.
Devitt said the loss isn't material to Amazon, which had revenue of $10.7 billion last year and $190 million in profits.

Devitt said the loss of Borders could result in a 2 percent decline in profits for Amazon.

However, Devitt said, Amazon could gain market share in book selling over time because it will have an advantage over Borders, which now will charge a sales tax for all books sold.

Companies have to charge a sales tax for Internet sales if they have a physical presence in states that collect sales taxes, Devitt said.

Amazon collects sales taxes only on books sold in Washington, North Dakota, Kentucky and Kansas. Borders would collect sales taxes in all 50 states, the company said.

Devitt also said Amazon has been successful in undercutting competitors with lower prices because of its sophisticated distribution system and shipping deals it provides to customers.

Borders' Web site announcement came as the company said it was shuttering nearly half of its Waldenbooks stores.

Borders reported a fourth-quarter loss of $73.6 million compared with a profit of $119.1 million the previous year.

The company also said it would continue its relationship with Seattle's Best Coffee, a coffee company owned by Starbucks Corp.

Roman said Borders has converted a majority of its existing cafes to Seattle's Best Coffee Cafes in its stores, and sales have been "impressive."
Old 03-27-07, 01:13 PM
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I'm not sure how they think they can compete with Amazon unless they significantly lower their prices from what they are in-store. They will have to be quite a bit lower still to make up for the sales tax.
Old 03-27-07, 05:20 PM
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I doubt Borders online would try to match Amazon's prices (on books, at least) since they'd be undercutting their brick and mortar stores.

It'll probably be a thing like B&N's website.

Is there a list of the Waldenbooks stores they're shutting down?
Old 03-28-07, 07:36 AM
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Originally Posted by Josh-da-man
Is there a list of the Waldenbooks stores they're shutting down?
All the ones in my area disappeared a few years ago.
Old 03-28-07, 07:43 AM
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From today's Wall Street Journal:

Borders Slashes Buyer Rewards, Cuts Discounts
By JEFFREY A. TRACHTENBERG
March 28, 2007; Page D1

The nation's second-largest book retailer, Borders Group Inc., has decided there can be too much of a good thing when it comes to its free membership-rewards program.

Less than a week after it reported disappointing fourth-quarter and annual results, Borders said that it is phasing out its popular Holiday Savings Rewards and Personal Shopping Days benefits and replacing them with a simpler, less-generous promotion called Borders Bucks.

The move will dramatically alter a program that has been a tremendous hit with consumers. Since the launch of the Borders Rewards membership club in February 2006, nearly 17 million people have signed up, and Borders continues to add an estimated 150,000 new customers each week. Borders' announcement comes at a time when many reward programs -- including those from credit-card companies and airlines' frequent-flier plans -- are tightening eligibility rules or becoming stingier with benefits.

Under the new Borders plan, each time customers reach $150 in purchases at Borders superstores or Waldenbooks stores, they will receive $5 in Borders Bucks at the beginning of the following month. They can then use that $5 until the end of that month, at which point the offer expires. Users will be contacted by email and urged to print out a $5 coupon, although those who forget will be able to use their $5 credit by presenting their Borders Rewards card in stores. Customers will be able to earn Borders Bucks online after Borders opens its own Web site next year.

The company announced the new program to customers in a cheery email that lauded the plan as "now simpler than ever" and "a new program to celebrate."

But, under the old plan, discounts could be much deeper. Members were given Personal Shopping Days, which enabled those who had spent $50 in a month to apply a 10% discount on all purchases made on a specific day in the following month. Gift cards were the exception. Customers also received a credit equal to 5% of their store purchases made through Nov. 14 in a special Holiday Savings account. That credit could then be used on purchases made from Nov. 15 through Jan. 31. The only caveat was that customers had to have at least $10 in their account -- which meant they had to have spent a minimum of $200 to qualify.

A big downside for Borders was that the company had to absorb all of the Holiday Savings account spending during its fourth quarter, a period when shoppers would have been in the stores anyway buying gifts. Under the new program, the impact on the company will be more regulated by enabling customers to claim their Borders Bucks year-round.

George Jones, the retailer's CEO, foreshadowed the changes to the program in January when he told investors that he intended to "make modifications in the program going forward." Earlier this month, Borders cited the "customer redemption of Borders Rewards benefits" as one of the reasons that gross margins as a percentage of sales decreased 3% in the fourth quarter.

But some of Borders biggest competitors are moving in the opposite direction, adding perks to their membership programs. In October, in response to sharper pricing from a host of price-minded rivals, including discounters and warehouse clubs, Barnes & Noble Inc. raised its discount for club members to 40% on hardcover fiction and nonfiction best-sellers, and added a 20% discount on all adult hardcover titles. Barnes & Noble previously offered a 30% discount on hardcover fiction and nonfiction best-sellers. Members continue to receive a 10% discount on most everything else sold in the store, including coffee and paperbacks, but excluding gift cards. Barnes & Noble, the nation's largest retailer of books, charges an annual fee of $25 to join its membership program. The company doesn't disclose the size of its membership club.

Amazon.com offers a Prime Membership program. For $79 a year, customers get free two-day shipping. Prime members can also get overnight delivery for just $3.99.

Borders Rewards members will still be able to redeem all of the benefits they have accrued so far this year. Shoppers currently participating in the Holiday Savings Rewards and Personal Shopping Days benefits will be credited for any purchases through April 11. Personal Shopping Day customers will be able to specify a day in May to apply their 10% discount on all purchases. And Borders customers who have spent at least $200 through April 11 will qualify for the Holiday Savings Rewards; those savings will be redeemable from Nov. 15 through Jan. 31, 2008. After April 11, the Borders Bucks program will be instituted.

"We get a lot of customer feedback on the Borders Rewards program," said Michael Tam, chief marketing officer. "They said since they are spending the money, they wanted to enjoy the benefits right away instead of having to wait until mid-November."

In addition, Mr. Tam said that Borders will now add special savings promotions to make up for the difference between the old and new programs. Although he declined to be specific, he said the retailer will be launching what it calls Bonus Rewards Events for all members. This could include days when discounts can be applied to all purchases, something previously available only to customers who had spent $50 in the prior month. Borders will also continue to send out weekly coupons via its email newsletter.

Some customers weren't impressed. "Why bother?" asked Ron Goodenow, a market research consultant and writer in Northborough, Mass. "I find that on a lot of things that I'm interested in like music and DVDs that their prices are higher than the competition." The five dollars, he says, won't mean anything to him. "It's gratuitous considering how much they've hyped the program."

A spokeswoman for Borders said she believes that based on the retailer's market research, most customers will be happy with the changes.
Old 03-28-07, 11:49 AM
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I sent an e-mail letting them know (in a nice way) I was displeased with their new program and that it was a step backward and in no way as great as they tried to make it sound. I sent it by clicking on the 'contact us' type link at the bottom of the e-mail detailing how their new program will work. The reply from "Amber" was a letter stating how their new program will work.
Old 03-28-07, 02:47 PM
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This change seems to explain why Borders has sucked for the past three or four months.

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