7:49 PM PDT, November 1, 2012
AMC Entertainment wants to thank you for patronizing its movie theaters. But not too much.
The company, which recently was purchased by a Chinese conglomerate, has quietly rejiggered its rewards program to be a good deal less generous in doling out credits for free tickets or food.
AMC's revamped loyalty plan is reflective of an ongoing trend in the business world to clamp down on runaway rewards, experts say. Airlines, banks, retailers and service providers are all offering less when it comes to acknowledging customers' steady business.
And in a sign of how shameless some of these take-backs have become, AMC declined to comment when I asked about its switcheroo. More on that in a moment.
First, let's meet Garden Grove resident Paul Bean, 38. He and his wife go to the movies several times a month, spending as much as $50 per outing on tickets and treats (depending on how many nieces and nephews they bring along).
To make the most of a pricey situation, Bean joined the AMC rewards program about five years ago. At the time, it was called MovieWatcher and allowed you to earn points for each ticket purchased. Those points could be redeemed for free tickets, popcorn or drinks.
The program was renamed AMC Stubs last year, and it was changed to award customers $10 worth of discounts for every $100 they spent on tickets and snacks.
One other noteworthy change: Whereas MovieWatcher was free to join, AMC Stubs came with a $12 annual fee.
"It was still a good program," Bean told me. "They acknowledged your loyalty. As someone who goes to the movies a lot, I appreciated that."
Now he's wondering whether he and other steady customers were victims of an elaborate bait and switch.
The theater chain previously applied the cost of any ticket, including discounted ones, to that $100 threshold for freebies. Now it says cut-rate tickets bought through discount retailers will no longer count.
This is a big deal to Bean. With ticket prices running as much as $12 at the box office, he'd buy packs of discounted AMC tickets that shaved a few bucks off the cost of moviegoing. Such tickets — dubbed Gold and Silver Experience tickets by AMC — are available at Costco and other retailers.
Costco's website shows that a pack of 10 Gold Experience tickets, which have no restrictions on use, can be purchased for $82.99 — a substantial savings over the $120 it might cost to buy the same tickets at the theater. Silver Experience tickets are a bit cheaper than Gold but can't be used all the time.
Important point: The Gold and the Silver tickets are issued by AMC, not the retailer. They're a promotion that the theater chain uses to boost business.
Bean and his wife attended a recent showing of "The Perks of Being a Wallflower." He handed the cashier his AMC Stubs card plus two Gold tickets.
That's when he found out that Gold and Silver tickets no longer count toward the Stubs loyalty program. "The woman at the box office seemed embarrassed to have to say this," Bean told me.
He later visited the Stubs website and encountered a box saying the terms and conditions had changed and if he didn't agree to the new contract, he could say adios to membership in the AMC rewards program. Needless to say, this wasn't what he signed up for when he joined five years ago.
"I'm extremely mad," Bean said. "I feel like I've been lied to."
Joseph Nunes, an associate professor of marketing at USC's Marshall School of Business, said he's seen cutbacks in various rewards programs in recent months because of tough economic times as well as a growing recognition that discounts don't necessarily breed loyalty.
"Businesses are becoming more stingy," he said. "But they also realize that you want to give rewards to the people who are the most profitable, not the ones who aren't."
In other words, AMC is no longer rewarding people who keep coming to the movies despite sky-high ticket costs, ridiculously priced popcorn and excellent home-theater systems. It's now rewarding only those who don't avail themselves of the company's own discount-ticket program.
Vanitha Swaminathan, a marketing professor at the University of Pittsburgh, observed that rewards programs can cut into a company's bottom line. Many companies, she said, crunch the numbers and decide it's not worth buying people's loyalty with discounts.
Apparently, that's what AMC has done.
When I first reached out to the company this week, AMC spokesman Ryan Noonan asked for some idea about what I'd like to know. I said I'd like to discuss the rationale for the contract change and whether, as Bean had inferred, this was a sort of bait and switch.
A day later, Noonan said by email that AMC was "going to pass on participating." I asked why. He didn't respond.
A real profile in courage, these guys. It's hard to imagine a company being more contemptuous of its own customers.
At the very least, AMC could have changed the terms for new Stubs members, but left things as they were for current members — who already have shown their loyalty to the chain.
AMC was bought in September by China's Dalian Wanda Group for $2.6 billion. Wanda now plans to invest an additional $10 billion in at least one more U.S. theater chain, the company's chairman said, plus department stores and hotel operations.
Maybe businesses don't have to be accountable for their actions in Beijing. But things are a little different on this side of the Pacific.
Bean, for one, said he knows what he's going to do. He's already looking into the rewards program for Regal Cinemas.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA_TV Channel 5 and followed on Twitter @Davidlaz. Send tips or feedback to email@example.com.
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