Reap rewards of vouchers and points...
Sign up to loyalty plans for gifts, cashback and days out. By
LOYALTY pays, they say, and millions of us are putting that maxim to the test by signing up to the countless rewards, points and voucher schemes now available.
But retailers aren’t just giving stuff away, they want something in return. So think twice before agreeing to pay a monthly fee as you could spend more than you save.
Here we look at what’s on offer...
Grab rewards every time you hit the shops
John Lewis, M&S, Sainsbury’s and Tesco all offer reward schemes to encourage you to stay loyal.
Andrew Hagger, cash and cards expert at personal finance analyst Moneycomms, rates M&S Club Rewards, available to M&S credit cardholders, since its core benefits require no spend at all.
These include a quarterly home and clothes voucher worth £15 in the spring, summer and autumn, rising to £20 at Christmas.
“Shoppers also get a £12 birthday treat voucher, and 32 free drinks vouchers worth £2.75 each – or £88 over the course of a year,” he says.
These add up to £165 a year, but the M&S card’s monthly charge adds up to £120 a year, which reduces the net benefit to £45.
“If you sign up, make sure you use those vouchers,” Andrew says.
However, cardholders also get unlimited free next-day delivery on M&S purchases, saving £4.99 each time, and earn four points for every £1 they spend, worth £72 a year on an average monthly spend of £150.
Tesco Clubcard is free and lets shoppers collect points on food, fuel, fashion and more, both in Tesco supermarkets and online.
Consider Tesco Clubcard Plus, says Andrew, which gives you extra benefits for a £7.99 monthly fee.
“It’s an excellent deal for those who do their weekly shop at Tesco, with 10% off your biggest two shops each month, up to a maximum £200,” he says. “You could get £40 back a month.”
Clubcard Plus holders also earn five points for every £4 spent at Tesco, which is worth £22.50 a year on a £150 monthly spend. You can also get double data on Tesco mobile and 10% off instore Tesco clothing and homeware brands.
The card’s £7.99 fee adds up to £95.88 over the year, but if you use your Clubcard Plus regularly, the benefits should outweigh the costs.
Life is sweet for shoppers who combine the Sainsbury’s credit card and Nectar points as there is no monthly fee. You get three nectar points for every £1 you spend at the supermarket or subsidiary Argos, worth £29.25 a year if you spend £150 on average each month.
John Lewis and Waitrose’s Partnership card is also free and saves you £22.50 a year on an average £150 monthly shop, Andrew says.
What’s right for you?
There is a big difference between retailer loyalty schemes, with shoppers potentially saving anything between 50p and £10 for every £100 they spend, according to research from consumer champion Which?. Paperchase Treat Me comes top as its vouchers and freebies save £10 per £100 of spending, as can the Waterstones Plus card Which? says. Iceland Bonus saves £5 per £100. Boots Advantage points save you £4, while Lidl Plus also saves £2, but this jumps to £10 if you spend more than £200 in a month.
Which? research shows that Tesco Clubcard and Superdrug Health & Beauty Card both save £1 per £100 spend, while Nectar saves 50p. Asda doesn’t have a loyalty scheme but its Christmas Savings Card gives you £1 when you save £30, rising to a maximum £15 on £280 of savings.
Morrisons’ loyalty scheme offers money-off vouchers and rewards via email or its app, with “clubs” for NHS staff, teachers, students, and families with babies. These clubs have offers, discounts and treats.
Which? retail editor Ele Clark says some supermarket loyalty schemes let you earn and spend points, while others unlock discounts and rewards.
“This makes it hard to work out which save most,” she says.
Loyalty points aren’t everything and your savings could be cancelled out if the shop’s prices are higher than its competitors.
Ele adds: “Don’t change your shopping habits just to earn points.”
Current account rewards Not to be outdone, banks now offer customer rewards on their current accounts to encourage switchers.
Andrew’s favourite is Club Lloyds current account, which allows you to choose from one reward a year – either six cinema tickets, 12 digital movie rentals or a magazine subscription.
You can also earn cashback when you pay by card or direct debit with selected retailers, including Co-op, Sky, Hilton and Costa with its Everyday Offers scheme.
Club Lloyds also pays interest of 0.6% on balances up to £4,000, worth £24 a year, plus 1.5% on balances between £4,000 and £5,000, worth another £15. To qualify you have to set up two monthly direct debits.
The account does have a £3 monthly fee, but this is waived if you pay in at least £1,500 a month.
Andrew’s second favourite is the NatWest Reward Current Account. “This has a £2 monthly fee, but you can earn £4 if you set up two direct debits, plus another £1 by logging into your mobile app each month.”
Customers can also earn 1% in rewards when spending with partners Caffe Nero, EuropCar, Barrhead Travel, Boux Avenue, P&O Ferries and ATG Tickets.
Andrew’s third choice is Santander 123, even though its rewards have been scaled back.
There’s a £4 monthly fee but you earn 0.3% on balances up to £20,000, worth up to £5 a month or £60 a year. Customers get 1% cashback on council tax, mobile, broadband and digital TV bills, rising to 2% on gas and electricity, and 3% on water bills. In each category, monthly cashback is capped at £5, but it could still total £180 a year.
Barclays Blue pays £7 a month if you set up two monthly direct debits, but charges £4, shrinking the benefit to £3. Current account customers also need to pay in at least £800 a month.
You can earn a further £5 per month if you take out a Barclays mortgage, £1 per month with a Barclays personal loan and up to £5 per month if you take Barclays life insurance with critical illness cover.
But Andrew says most people would probably be better off shopping around for these products.
Cashback apps and cards
Millions of people now save money using cashback apps, and there are loads to choose from, with TopCashback and Quidco among the most popular.
Damien Fahy, founder of personal finance website moneytothemasses.com, rates Shopmium, which has exclusive supermarket offers, such as free products, twofor-one deals and cashback. You can get triple rewards by signing up with different schemes.
“You can claim the Shopmium reward, earn points on your Tesco Clubcard or Nectar, and pay on a cashback credit card,” he says. Cashback credit cards may offer better value, such as the fee-free Amex Cashback Everyday, which offers up to 5% cashback for three months, up to a maximum £100, and up to 1% after on all spending, not just at selected retailers. You have to pass credit checks though.
Damien adds: “Always clear your balance in full each month, otherwise the interest will cost a lot more than the cashback you earn.”
Don’t change your shopping habits just to earn points. Which? retail editor Ele Clark