• by Sarah Mahoney  @mahoney_sarah, March 31, 2011

Regional grocer Big Y is unleashing what it says is a big idea: A new loyalty card system that will charge members a $20 annual fee, in order to qualify for deeper discounts than offered by its long-standing loyalty programs.

"We were intrigued by a premium card and the whole Costco notion of paying for membership," Harry Kimball, director of database marketing for the Springfield, Mass.-based chain, tells Marketing Daily. "So we thought, 'what would happen if we found a way to expand our employee-only rewards-program to customers?'" The "Silver Savings Club" concept did so well in initial testing in six stores that the chain is now offering it in all 58, via its weekly flier, which also includes a $5 off coupon for the first year's membership.

Kimball says the chain thinks that the idea of consumers paying to save will work, because it won't change its already well-established rewards program, which includes a conventional rewards card, as well as a system of gold and silver coins that shoppers earn and then can redeem for additional savings.