How ASDA could have potentially left themselves open to give away up to 12.5% on all shops over £40

ASDA have recently launched an offer which gives you a £5 voucher off your next £40 spend if you spend £40.

There are 3 simple steps:

• Spend £40 or more* on your Asda shop between 26th March 2012 and 7th April 2012
• Take the Asda Price Guarantee challenge between 26th March 2012 and 22nd April 2012 and receive your £5 Off £40 bonus
• Redeem your £5 Off £40 bonus** when you spend £40 or more at Asda between 26th March 2012 and 22nd April 2012

*£40 spend must include 8 different grocery items of which 1 must be comparable. Excludes purchases of infant formula, prescriptions, optical, fuel, mobile top-ups, gift cards and purchases from kiosk.

**Original receipt required for redemption.

N.B. the above offer is subject to terms & conditions.

Of course, ASDA have purposely made the offer difficult to exploit and is really just a marketing ploy as most people will spend more than £40 on their first shop, and more than £40 on their second (and only voucher redemption) shop.  In reality, this will equate to a gross discount of less than 6%.

However, some hardcore ‘discount junkies’ could have received much more discount by splitting their spends up to into multiple £40 spends over the course of the offer or ’stockpiling’.

Just for fun, let’s have a look at the maths…

The formula to calculate the overall discount is:

Where:

p = total % discount
d = discount voucher value (£)
s = spend required for voucher redemption (£)
(x) number of spends / voucher redemptions

Most people who qualify for a voucher would only do so once, and redeem it once, so even if they only spent £40 to qualify for the voucher and redeemed it on the subsequent £40 shop, their discount would only be 6.25% (£5 off a total £80 spend).

However, if a customer wanted to do multiple shops in the offer period, they could get closer to 12.5% discount (£5 off a £40 spend).  This could be possible for large spend households or customers who want to ’stockpile’.  The more vouchers used, the closer to the 12.5% you would get as represented by the graph below:

For example, if a customer made 4 x £40 purchases and redeemed the 4 vouchers on subsequent £40 shops before 22nd April, their gross discount level would be 10% as shown below using the above formula:

5 x 4 / 40 x 4 (+ 40) x 100 = 10%.

So, when you see such an offer in the future, it could be worth thinking how you could make it work in your favour!

© 2012 Paul S Flintoft

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