Put in the card work with cash

With so many reward cards now available for shoppers, we show you which offer the best value for you to save money

TESCO has removed the option to swap Clubcard points for Avios points and Now TV is leaving the scheme on January 31.

This is bad news for keen travellers, who used Avios points to rack up air miles without ever having to pay for flights.

But it’s not going to cool our passion for points.

We love the idea of getting something for nothing, which is why, according to TCC Global, the average person has three loyalty cards tucked in their wallet.

What’s not to like about getting a weekend away, a free lunch, or bunch of Christmas presents in return for spending money on everyday essentials we were going to buy anyway?

But deep down, most of us realise this isn’t really something for nothing. So we need to understand the price we’re paying for these points and to be sure we’re cashing in on the most rewarding schemes.

Sarah Coles, personal finance analyst at investment firm Hargreaves Lansdown, said: “The money we get back through loyalty cards doesn’t come from thin air – it comes from the profits that shops make.

“In order to make profits big enough to carve rewards out of, they need to pay their suppliers less and charge shoppers more. It means that, overall, we’re paying for these rewards through very slightly higher prices.”

On the one hand, if you shop somewhere that offers a loyalty card, you’re already paying for it, so you may as well take advantage.

On the other hand, there’s a good chance you’ll pay less somewhere with a leaner approach – which doesn’t have a loyalty card – like Aldi or Lidl.

You also need to be comfortable that the store is keeping a record of what is spent when you use this card, which will help it build up a clearer picture of you and your shopping habits.

This enables a shop to market things to you more effectively. It can also track shopping habits because it can see where you live and where you spend. Stores don’t tend to sell this data on but may share it with their reward partners.

Sarah said: “When reward cards were first introduced, they were used to persuade us to buy particular products by giving us a special price or more points. This approach fell out of favour but is making a comeback.

“It raises the risk that we’re persuaded to spend more, either by buying things we didn’t intend to, or switching to a more expensive brand.

“It’s always worth checking whether the specialprice item is more expensive than own brand.

“And if it’s cheaper, bear in mind this is a one-off for financial reasons, so you need to return to the own brand in your next shop. If they successfully get you to trade up brands forever, you’ll end up spending far more.”

The other key thing is to ensure you use the points in the most rewarding way possible. You can get money off your shopping but often you can also swap points for those with partner firms, which offer you more.

Tesco made big cuts to these deals a couple of years ago but you can still get three times the points from some partners, so a £2.50 Tesco discount becomes a £7.50 saving at a Pizza Express restaurant.

In many cases, we don’t make an active decision about where we rack up points since it’s more about convenience than anything else. However, if you have a choice, it’s worth weighing up what’s on offer and what works best for you.

Right now, you can get reward cards from Tesco, Sainsbury’s, Marks & Spencer, Co-op, Morrisons, Waitrose, Iceland, Superdrug and Boots.

WHO OFFERS WHAT

■ TESCO was the first to launch in 1995. The Clubcard scheme offers one point for every £1 spent and one point for every £2 spent on petrol. One point converts to 1p.

■ SAINSBURY’S Nectar card offers one point per £1 but each point is worth 0.5p. You can add special offers to your cards, and earn points through retail partners including eBay and Argos.

■ MORRISONS offers five points per £1 – on everything including fuel and café purchases. However, each point is worth just 0.1p.

■ BOOTS offers four points per £1 and each point is worth 1p. You can also sign up to emails and load extra discounts and offers to your card.

■ SUPERDRUG offers a point for

Overall, we’re paying for these rewards through very slightly higher prices

every £1 you spend and each one is worth 1p. You also get free delivery on orders worth over £10.

THE OTHERS... not rewards cards as such

■ CO-OP runs a membership card scheme which makes you a member of the Co-operative. The card costs £1, and gets you two per cent back on Co-op branded items (another two per cent goes to local good causes), plus other incentives. The money the card builds up can be spent in store on other Co-op products.

■ ICELAND’S card lets you pre-load cash on to it to spend in store and for every £20 you load, you get another £1.

■ WAITROSE offers discounts and perks instead of points, including the ever-popular free tea and coffee.

■ MARKS & SPENCER has its Sparks card, which offers 10 points when you shop plus another 10 for every £1 you spend. You collect them for perks and it gives you access to discounts too.

WHO’S THE MOST GENEROUS

The most rewarding scheme is Iceland’s which gives a five per cent return. Next is Boots, which offers a four per cent return, and the Co-op is third at two per cent (plus two per cent to good causes).

Tesco and Superdrug are next with a one per cent return, and Sainsbury’s and Morrisons come bottom at 0.5 per cent. The caveat with Sainsbury’s is that the Nectar card lets you build up points from spending at other retailers, and will run double and triple point promotions, boosting the return.

If you swap Tesco points for partner deals, you can get much more for your money but you need to check the small print for that too before you make the swap.

You might find, for example, that vouchers offered for some hotel chains can only be used on full-price rooms and that certain dates have very limited availability. So look before you leap.