Calgary Co-op criticised by members after switching patronage payment to app

Until now, the profit share has been returned to members via an annual cheque payment

Canadian retailer Calgary Co-op has revamped its membership scheme, transferring its patronage rebate programme to a new, member-only app.

The patronage payment is the co-op’s method of returning profits to its members, based on their annual spending at its stores and how well the co-op has performed.

Members also accumulate equity – shares built up through their patronage earnings, starting with the initial CA$1 share purchased in order to join the co-op. Every year, some of the year-end patronage may be returned in shares (and some will come via the patronage return).

Until now, the patronage payment was returned to members with an annual cheque; it will now be stored on the new app, where it can be used to spend in the co-op’s stores.

In a recent announcement, Calgary Co-op told members: “As we continue to evolve and modernise our co-operative, we are changing how patronage is paid and equity is structured to make it more simple, immediate and transparent.

“Your 2023 Patronage refund will be deposited into your Bonus Cash Bubble and available to redeem at Calgary Co-op businesses.”

It added: “We are reducing our equity and cash payout rates from 11 tiers to 3 tiers meaning most members will get a great proportion of their patronage back in cash.”

The move was approved by members at the co-op’s AGM – but has still sparked complaints from some members, including a Facebook group Keep the COOP in Calgary COOP, where member Shane Cullen posted: “Thanks Calgary Co-op for my patronage refund. Let’s see, I do not want it on the Co-op app, I do not want to use it to buy services at Co-op businesses’. I want the cheque so I can do what I want with my Dividend. I earned it, you are not going to tell me how to spend it.”

Fellow member Tania Irvine responded: “Membership refund patronage should not be tied to app bonus cash. Membership is charged a fee and this membership should be kept separate from your app and bonus cash. Do not dictate to membership how to use their refund.

“You have overstepped with your revamping of your policies expecting people to accept this. This membership was never a points reward system attaching any rewards points to use as cash to purchase system.“

Others suggested that the co-op’s older members would be less likely to use apps, causing further problems with the new system.

In a statement on its website, Calgary Co-ops says: “All Calgary Co-op members will continue to earn patronage and receive their patronage return, with or without the app.”

It adds: “Our Membership Services team will work directly with our members who do not have any technology to ensure they receive their 2023 Patronage,” and asks members to register for an online account at mycalgarycoop.com

Explaining the change, it said: “As we continue to evolve and modernise our co-operative, we are changing how patronage is paid and equity is structured to make it more 1) simple 2) immediate and 3) transparent.

“We are 1) simplifying our equity tiers from 11 to 3, to allow members to earn cash faster, 2) receive it as a lump sum earlier each year in the Bonus Cash Bubble of their Calgary Co-op app and 3) see it accumulate in the app throughout the year in order to connect with the value of shopping at Calgary Co-op.

‘In a nutshell: it’s more cash paid out to you sooner at a time when our members need it the most.”

It added: “As a co-operative we must manage our operating expenses to maintain our patronage levels. As costs are going up everywhere, we can keep our patronage rates strong through innovate tools like this app.

“Keeping the profits in our co-operative allows members to invest back into the community and the co-operative, ensuring a healthy future for Calgary Co-op which benefits all our members; a practice that is common across many other co-operatives and retail businesses.

“Our refreshed membership programme makes Patronage simpler, immediate, and more transparent. Members will earn cash faster, receive it as a lump sum earlier in the year, and see the current year’s patronage accumulate throughout the year in the app.”

Officials told Global News that a significant number of members have already downloaded the app, adding that downloads are increasing each day.

Calgary Co-op has been contacted for further comment.

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