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Unlikely Grocery Savings With Cards?

The average American spends an average of $4,500 on groceries and more than 3/4 of all households belong to a supermarket savings club.

The cards are designed to promote savings and a feeling of savings. But they may not be saving you as much money as you think.

Wall Street Journal reporter Katy McLaughlin put the cards to the test in an informal, unscientific study and told The Early Show the result of her investigation.

The Wall Street Journal went to five supermarkets in five cities (Atlanta, Brooklyn, Chicago, Dallas and San Francisco) and compared the cost for 20 different everyday items. They purchased the items using the supermarkets' savings cards and compared the same 20 everyday items when purchased at a store nearby that doesn't have a card.

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In each instance, it was cheaper to shop at a store that doesn't have a card program at all than to shop in a supermarket with a card. McLaughlin concluded that the cards — though they might be able to provide you with savings on select items periodically — don't really confer a savings advantage when compared to other stores, particularly superstores like Target and Walmart. In one case, the Wall Street Journal spent 29 percent less at a supermarket that didn't have a saving card.

The report says cards do generate more revenue for stores, however. About 10 percent of shoppers at card stores don't use the cards. The result is that they pay full price for things that are actually on sale.

Here is a breakdown of the WSJ shopping spree:

  1. Marina Safeway, San Francisco: Using the "Safeway Club Card" the WSJ grocery bill totaled $66.17. The store said the WSJ saved $18.62 using the club card.

    Shopping at a Cal-Mart nearby, which doesn't have saving cards, the WSJ paid less money ($62.66) for the same 20 or so items.

    McLaughlin says some "two-for-one" deals require buying two items, while others let you get half price on just one. She says the WSJ spent more at Safeway but got a lot more food because of the two-for-one deals.

  2. Key Food, Brooklyn, N.Y.: Using the "Keysavings Club Card" the WSJ grocery bill totaled $57.79. But the WSJ didn't get any card discounts (nothing was on their list on card special).

    Shopping at a nearby Associated store, which doesn't have saving cards, the WSJ paid pennies less ($57.14) for the same items.

    McLaughlin says some card deals had strings attached. To get a break on Pepsi you had to buy 10 liters.

  3. Dominick's, Chicago: Using the "Fresh Value Savings Card" the WSJ grocery bill totaled $94.77. The WSJ's receipt said the "Fresh Value Savings" was $7.46.

    Shopping at a nearby Treasure Island, which doesn't have saving cards, the WSJ paid less money ($89.97)

    McLaughlin says the WSJ bought lots of club items at Dominick's, but there were even more sales at Treasure Island. She notes that if you forget your card, you can just give the cashier your phone number.

  4. Albertsons, Dallas: Using the "Preferred Savings Card" the WSJ grocery bill totaled $55.48. The WSJ's "Preferred Savings" added up to $4.94.

    Shopping at a nearby Super Target, which doesn't have saving cards, the WSJ paid less money ($50.92) for groceries.

    McLaughlin says the WSJ spent 8 percent less shopping at Super Target.

  5. Kroger, Atlanta: Using the "Kroger Plus Savings Card" the WSJ grocery bill totaled $48.89. The WSJ's Kroger Plus Card savings added up to $5.77.

    Shopping at a nearby Wal-Mart Supercenter, which doesn't have saving cards, the WSJ paid less money ($34.70).

    McLaughlin says the WSJ saved 29 percent on its list by shopping at Wal-Mart. However, Wal-Mart didn't have some things on the shopping list, such as its preferred trash bags and soup.

McLaughlin says though many people might think they are saving money with these cards, in reality they are not. Others sign up for these cards protectively feeling that at least they won't lose more money by not having these cards. But, some people have actually begun grass-root campaigns against the cards because of their concerns of privacy invasion.

Here are some shopping tips from McLaughlin:

  • You may save more money by avoiding stores that have discount cards altogether. In all five cities where the WSJ shopped, it spent less on the same list of groceries at stores that don't have cards.
  • You may really save money by shopping at the growing number of discount supercenters, such as Super Target and Wal-Mart supercenters. The WSJ saved 29 percent of the same list of groceries at a Wal-Mart as compared to a store with a discount card.
  • Learn how to interpret the "savings" on the bottom of your bill at card stores. At Safeway, the WSJ were told it saved a lot of money. What it really got was more food, because of 2-for1 specials. In other cases, it did save on a few items, but it spent more on lots of other items, leading to a greater cost over all.
  • Never shop in a card store without using the card, unless you want to pay a lot more.
  • If you are uncomfortable giving a supermarket your personal information, don't. The WSJ found stores tend to be very flexible about information given to them and will still give you a card even if you don't fill in all the blanks on the application form.
  • Let your market know how you feel about cards. Some of expressed their displeasure with the saving cards but supermarkets say their customers love the cards.