If I'm already at the checkout lane, I've already made the decision to buy those items at Target. I've already looked at the price while I shopped. If I put it in my cart, I've deemed it a "fair" price. Most of us know the "going rate" for our usual staples.
I have sat in front of the milk cooler, knowing that milk was 50cents cheaper that week at Kroger. But also knowing that saving 50 cents wasn't worth driving 5 miles out of my way to run a separate errand at Kroger. So I decided to buy the milk at Target. The 5% wasn't the deciding factor though. Conversely, I have looked at a pound of chicken for $4/lb knowing I could buy it at Sprouts tomorrow for $1.69/lb and I leave it at Target. Having a 5% discount (or as an employee 14.5% discount) isn't worth it.
By the time I get to the checkout, my decision has been made. I'm buying these items at Target. Based on quality, convenience, and price, I have deemed the items in my cart a good value. The only question is, how will I pay? Pull out my Chase debit card for $100 or my Target debit card for $95? If I use my Target card, I just saved 5% on the items I was already planning on buying, red card discount or not.
Are you mentally incapable of understanding the concept of what "savings" means in the context of rewards cards from retailers?
1.) Companies use rewards cards to drive in sales. Advertising that customers "save" money generates PROFIT. Now, I want you to really think about this. How does you saving money = the company making more money than usual?
2.) If you have an annual budget of $1000 for groceries, that $1000 will go to either Target, or to some other competitor. You aren't saving money if you spend the same amount of money at Target with a 5% discount, than at Kroger, with no discount. It's still $1000. It's not a savings if Store A is more expensive, yet offers a discount on their higher price. In fact, because you have an incentive to spend, you're more likely to purchase more than you normally would. That's how companies profit off loyalty cards.
3.) Spending, is the opposite of savings.
4.) It's called a "loyalty card" because it means you're more likely to shop there, not because you'll save more money than you would anywhere else. With all your saved money, you're more likely to invest that money again into the same store. Hence, loyalty.
You don't have positive income or savings because of a small discount that is even less than sales tax. Your spending is most likely the same if not more, and like I said, unless you've actually done the research into your own spending trends, YOU don't even know for sure how your savings have paid off. All you have to go off of, is the tally on your receipt saying you saved $100....despite spending thousands. It's a drop in the bucket.
I'm not saying that Target's 5% isn't nice or valuable to some degree, and my skepticism doesn't mean I'm trying to say marketing is somehow insidious and evil. Both consumer and retailer benefit. However, I am saying that your outlook on the matter plays perfectly into the marketing behind it, and isn't totally logical. 5% doesn't save you money, you just leave with 5% more stuff in the long run. Your loyalty means your dollar may stretch a little further with Store A, but you're still going to spend the same amount of money, and you're likely to spend more because of the savings you think you've accrued. It's not likely you're getting positive income into your pockets, which means you aren't "saving" any money. Spending, is the literal opposite of saving. Below are some sources to back up my claims about the psychology at work here marketers use to drive sales.
Consumer behaviour - Wikipedia, the free encyclopedia