How to make the most of loyalty programmes
Rewards can make parting with your cash easier – but make sure they really are worthwhile
CLICKS ClubCard, Pick n Pay Smart Shopper, Dis-Chem Benefits – loyalty programmes are everywhere and 79%* of South Africans belong to at least one. Studies show the most userfriendly loyalty plans are the most popular. Do those cards really add value? We take a look.
A LOYALTY PLAN WORKS IF . . .
▶ It’s easy to understand. The real earning rate – in other words, how much you have to spend to earn a loyalty unit – has to be easy to understand. For example, for every R5 you spend at Clicks you get one point, and one point = 10c. So if you’ve spent R50, you get R1 back. Plans that reward you in money are the easiest to understand, as you know how much you can buy with your earned rands.
▶ What you get back is more than what you pay in fees. Retailers' cards such as Edgars’ Thank U card, Clicks’ ClubCard and Pick n Pay’s Smart Shopper are usually free, while loyalty programmes with banks usually have a fee attached to them. If the annual fee is, for example, R150, you have to get back more than R12,50 a month to justify the cost. Or the benefits – such as gym discounts, discounted magazine subscriptions, fun run entry discounts or discounted flights – must amount to more than what you pay in fees annually.
▶You’re already spending at the place(s) linked to the loyalty programme. Loyalty pro- grammes should fit into your lifestyle and reward you for most of your purchases. When you have to go out of your way to earn points – for example, driving further and therefore using more petrol – it’s probably not worth the reward.
▶ You should have many spending options. Some loyalty programmes let you earn points at various outlets but allow you to spend those points at only one place. The most convenient programmes allow you to spend and earn points online or at a variety of outlets. That way you can earn the most points and spend the rewards on the things you need most, such as groceries, airtime, petrol and electricity.
▶ It should be easy to check your balance. Smart Shopper, for example, has an app that’s easy to use, it lets you convert your points to rands and it shows you which products you can get a discount on.
IT DOESN’T WORK IF . . .
▶ You signed up at the start of the year but didn’t use any rewards. It’s one of those things you could easily forget about – put a reminder in your calendar to check after three months if you’ve actually used any of the benefits.
▶ You spend unnecessarily just to earn points. This happens especially if the loyalty programme includes a joining or annual administration fee, or if you buy things you don’t need just to earn points. Rather do a review three months after joining to see if it’s worth planning better to maximise the benefit. If not, cancel your membership.
▶ You don’t qualify for the necessary tier. Be wary of loyalty plans offering “up to 20%” cashback on your purchases – you might not qualify for the specific tier. Many programmes are structured in tiers so that the more you spend the better your rewards. The tier you’re categorised in might have only a 2% rate attached to it and you’ll get out much less than you thought you would. The really substantial discounts in these tiered plans apply only to those in the top tier.
THE BENEFITS
▶ You can save a significant amount. Keep track of what you gain every month to see if it’s worth renewing your membership (in the case of paid-for loyalty programmes). The most obvious benefit is getting discounts on your shopping.
▶ Some loyalty programmes let you accumulate points to spend on a specific things, such as Christmas shopping.
▶ Many loyalty plans let you make up the shortfall on purchases with cash if the rewards alone aren’t enough to cover the cost.
▶ Some benefits let you buy online to earn rewards, which you can use in turn to make other online purchases such as Discovery Miles at Loot or eBucks at Takealot.
▶ Most loyalty programmes have a list of partnerships where you can also earn rewards. For example, with your Thank U card you can earn loyalty points at any of the Edcon Group’s retailers – such as Jet, Boardmans, CNA and Red Square – as well as if you fill your car at Engen. You can exchange your Smart Shopper points for a Ster-Kinekor movie ticket, or get discounted movie tickets at Nu Metro if you swipe your Clicks ClubCard.
▶ It’s often possible to donate loyalty rewards to charities for their use.
CHECK THE FINE PRINT
▶ If your benefits have an expiry date, there’s no point in accumulating points that are valid only for a short time.
▶ There might be several minimum requirements before you qualify to use your rewards.
▶ It’s possible that your loyalty card could expire or be deactivated if it’s not used for a certain period.
▶ Check for exclusions. Are you earning points on everything in your shopping basket or only on certain products?