Rainbow's new reward: Groceries, not gasoline

Fuel is out; food is in at Rainbow.

The grocery chain has dropped its Fuel Perks program and replaced it with Fresh Perks.

With the Fresh Perks program, cardholders get 1 percent cash back on purchases totaling $400 or more. In effect, spending $400 produces a $4 reward. Spend less than $400 between now and July 20 and rewards cardholders get nothing.

"A lot of people think they won't spend $400 in a few months, but if you spend $37 a week or more, you'll get to $400 between now and July 20," said Vivian King, a spokeswoman for Roundy's, which owns Rainbow.

King said the company dropped the fuel rewards program because customers who don't drive couldn't take advantage of it. The new program is more accommodating, she said.

Some bloggers aren't embracing the change. Karen Gunter, founder of Twin Cities-based Creativecouponing.com, said, "I don't like it. The Fuel Perks program was a better deal."

The Fuel Perks reward was 5 cents per gallon for every $50 spent on groceries. The discount was applied at the pump, up to a maximum of 20 gallons. Then the rewards balance was reset to zero.

But King said the average fill-up in the former program was 10 gallons, which netted the cardholder a 1 percent savings. That's equal to the percentage savings in the new program, she said.

Consumers who filled up with more than 10 gallons received a benefit between 1 and 2 percent.

The difference between the two programs, said supermarket analyst David Livingston, is that in the old rewards program cardholders only had to spend $50 instead of $400 before receiving any savings.

"It's confusing for the consumer," he said. "Roundy's is counting on consumers not figuring it out."

He describes most loyalty-card programs as a gimmick middle-of-the-road chains use because they can't compete with Wal-Mart or Target on price and higher-end stores such as Lunds and Byerly's on service. "But they're popular with shoppers who haven't defected," Livingston said.

Currently, Rainbow's website has about 40 loadable coupons worth about $75. But hard-core couponers don't like the fact that the loadable coupons cannot be doubled.

Rainbow's most popular current promotion is doubling manufacturers' coupons (up to $1 value per coupon) on Saturdays, if a shopper spends at least $25. The new program requires a rewards card to take advantage of the double double coupon days, when customers can double up to 10 coupons instead of five.

Previously, customers did not have to be rewards members on double double day promotions.

Rocha downplayed the differences between the two programs. "They're about the same," she said.

With the old system, customers who didn't live near a Shell station (Rainbow's partner in the promotion) were less likely to use the gas discount.

Customers looking for additional ways to reach $400 can purchase non-Rainbow gift cards at the service desk. Offers vary per store but include Nook merchandise, restaurants and hotels.

Rainbow customers missing the savings on gas can still save a nickel per gallon for every $50 spent, as long as they're willing to switch to Cub. That supermarket chain has a discount program with Holiday stations that's still in effect.