CT money to be discontinued

I don't think there has been any official confirmation of its demise. Right now, it's all speculation. The article only uses the word "may".

http://www.thestar.com/article/634610

Ink may be fading on iconic gas money

May 15, 2009 04:30 AM

Dana Flavelle
Business Reporter

It's worth less. There is less of it. And someday, it may quietly disappear altogether.

Canadian Tire money is still a hugely valuable loyalty program to one of Canada's most popular retailers. It is one that chief executive officer Stephen Wetmore, who took over from Tom Gauld at the beginning of the year, believes will help pull it into the future.

"Canadian Tire money is an asset whose worth, in my view, we haven't even begun to realize," Wetmore told shareholders at the company's annual general meeting in Toronto yesterday.

But the actual physical pieces of paper that look and feel a lot like real money may eventually be replaced by points collected on credit cards or even cellphones.

"We haven't made those decisions," Mike Arnett, president of Canadian Tire Retail, told reporters at a press conference later, after Wetmore lobbed the question over to him.

"People love the paper money, so I don't see it happening in the near term."

But, in a way, it is already happening. Holders of Canadian Tire's Options MasterCard earn their "money" electronically.

The money is added and redeemed on the card. No paper changes hands.

The paper money is used only to reward customers who pay with cash or debit – and even then its value is diminishing, a long-time collector says.

A $100 purchase generates just 40 cents worth Canadian Tire money, for a value of .04 per cent, said Jerome Fourre, a Montreal-based collector and co-author of The Bilodeau Guide, a collector's guide to the value of Canadian Tire money.

Most loyalty programs reward customers with between 1 and 2 per cent of the value of their purchase.

Canadian Tire Corp. declined to confirm Fourre's figures, but said the loyalty program is worth more to cardholders than to customers who pay cash. The amount of paper Canadian Tire money in circulation has dwindled, spokeswoman Lisa Gibson also said.

Wetmore cited the loyalty program as one of the drivers of future growth for the company as its faces growing competition from the world's "largest and most sophisticated retailers" and also the changing demands posed by an aging population and new Canadians.

He said electronic loyalty programs generate data that help retailers manage their stores by allowing them to track what people are buying and where.

Wetmore also said customer service is so important he's personally heading an initiative aimed at creating a consistent experience across the country.

The country's biggest auto-parts and household-goods retailer, which also operates gasoline bars and a financial services unit, reported a 26 per cent drop in profit to $49.7 million, or 61 cents a share, for its first quarter as lower gas prices eroded earnings from its fuel stations.

It also blamed bigger write-offs and bankruptcies in its financial services division. Still, earnings topped analysts' estimates of 56 cents a share and $1.78 billion in revenue, sending the stock price higher yesterday.

Revenue fell 2.7 per cent to $1.79 billion, while sales at stores open more than a year rose 2.5 per cent.

Like other retailers faced with an economic downturn, Canadian Tire finds itself trying to do more with less. It expects to spend $35 million less than planned this year on store improvements, for a total of $360 million, down from $472 million the year before.

The company has launched two new concept stores, the Smart Store, a retrofit designed to make its larger outlets more productive, and a Small Market store aimed at communities of fewer than 8,000 people.

Senior vice-president of stores Glenn Butt said consumers expect retailers to refresh their stores more often, as frequently as every five years, instead of every eight or 10 years.