Target unveils new pharmacy incentives

MINNEAPOLIS Target unveiled changes in its rewards program for customers who shift their prescription drug needs to one of its more than 1,580 in-store pharmacies.

On Thursday, the chain unveiled a change to its pharmacy rewards program, in line with broad enhancements to its full-scale store loyalty program, REDcard. “Beginning this fall, guests will receive a coupon good for 5% off a future day of shopping every time they fill five prescriptions at a Target pharmacy with a Target REDcard,” the company announced.

The new program marks a change in Target’s incentive efforts, cutting the storewide discount but also cutting in half the amount of prescriptions required to claim the discount. Currently, customers get a coupon good for 10% off a future day of shopping every time they fill 10 prescriptions at a Target pharmacy with a Target REDcard.

The new incentive, however, may be eclipsed by the simultaneous launch of the company’s expanded, storewide REDcard program, under which customers “will receive 5% off at check-out every day when they use a REDcard at any Target store or on Target.com,” according to the company. That program also launches in the fall, following a test in Kansas City that began in October 2009.

“Guest response has been overwhelmingly favorable, leading to meaningful incremental sales and profits,” Target noted in a statement June 3. “The response has been particularly strong among our existing better and best retail guests.”

Target predicted the expanded REDcard program will add roughly “one percentage point to comparable-store sales and have little to no impact on consolidated earnings” in the fourth quarter of this fiscal year, and will lift comp-store sales one to two percentage points in 2011.

“We believe guests will appreciate the simplicity and compelling value of this program, which will lead them to choose to shop more often at Target,” said Gregg Steinhafel, chairman, president and CEO. “As a result, we expect this new program to drive profitable incremental sales, which will more than offset the cost of providing this everyday discount to our cardholders.”

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