Served Fair: Zomato, Swiggy Cap Password Sharing For Loyalty Schemes

Food delivery firms Zomato and Swiggy are restricting password sharing to protect their loyalty programmes from misuse.

Members will be able to use their accounts only on two devices, the Financial Express reported. Users took screenshots of Zomato Gold offers—the company’s loyalty programme offering discounts—and shared with them non-members. Zomato’s new rules fixes such loopholes, the report said.

As the loyalty programme evolved, Zomato capped the number of free dishes per table, allowed restaurants to decide on the discount percentage, and extended the benefits of the scheme to home delivery, the report added.

These updates have been introduced as Zomato’s investors push it to deliver profits. Earlier, the company had said that it was on track to break even by Q2FY24. “Zomato Gold is intended for personal use and, as stated in our terms, can only be used on a maximum of two devices. This restriction helps prevent any misuse and ensures the sustainability of the programme,” a company spokesperson told the newspaper.

Abhisek Banerjee, lead analyst, internet, ICICI Securities, was quoted by the report as saying: “A lot of the power users, who order around 100 times in a year or for Rs 40,000 per annum, are not going to be stingy and share passwords anyway, so from a long-term perspective, the restrictions on password sharing is going to be in the right direction of profitability. The move might impact the number of orders and the gross order value for one quarter, but it’s not a systemic risk. It helps the players weed out consumers making use of loopholes.”

The two companies tailor their loyalty programmes: some users pay Rs 249 for three months, while for others the charge is more than Rs 349 for the same membership.

Explaining the differential charge, a Swiggy spokesperson said, “From time to time, one may come across a few cases of users receiving a discount on the subscription fee. We offer these time-bound discounts to users whom we believe have not fully realised the benefits of the programme to encourage higher participation”, the report mentioned.

Analysts said the differential pricing scheme was a result of customer’s order frequency, nature, order value, and may include several other internal calculations, said the report.