Shoppers set to reap dividends as Co-op revives old tradition

Shoppers used to queue round the block for it. For some, it was a lifeline; for others a special treat, a few extra pennies to spend on their favourite luxury. And now it's back.

The Co-op dividend - or "divi" as it was better known - is to be re- introduced into more than 600 stores up and down the country from today.

First introduced in 1844 by the Rochdale Society of Equitable Pioneers, the dividend was a payout given to customers as a percentage of an individual Co-op's profits. Today, thanks to new technology, it will be more like a bonus loyalty scheme which will pay back up to 5 per cent of customers' spending.

The original divi died out among individual Co-operative wholesale societies in the 1960s and 1970s to be replaced by Co-op stamps, which were in turn discontinued during the 1980s.

The latest scheme - which is sure to cause anxiety among the bigger supermarket chains, whose loyalty schemes have only a 1 per cent return - has been made possible by check-out technology that automatically records transactions in a member's account.

Pilot schemes in Scotland and Northern Ireland have been enormously successful. In less than a year, 500,000 Scots signed up for the scheme and shared pounds 5m in paybacks, either in shopping vouchers or cash.

In Northern Ireland, 185,000 customers have been given back pounds 2m.

And, because the returns are measured in whole pounds, customers can choose either to roll over spare cash to the next six-monthly payout or donate it to local community schemes. So far, on the pilot schemes, customers have given pounds 320,000 to local charities.

John Bowes, general manager of the Co-operative Wholesale Society, says it is rare for customers to get back a full 5 per cent, but he added: "In practice, we have found the average is 2 per cent, which is still double that of any other retailer's scheme."

Mr Bowes added: "As one of Britain's best-loved shopping traditions, the divi has inspired many imitators, but with the help of new technology, the Co-op is putting the divi back where it belongs - into the pockets of our customers and into the community."