Virgin launches new rewards deal – but is it worth signing up for?

ANEW rewards scheme hopes to lure customers by offering everything from air miles to sausage rolls. The Virgin Red scheme encourages people to visit its website or download the phone app – and buy goods and services offered by a number of online shops. It works a little like a cashback website, but instead of getting money back, you earn points. These can be used to get discounts on a list of services and goods. It does not provide a loyalty card such as schemes run by Nectar and Boots.

Despite offering an eclectic choice of items to buy, critics believe the range of online shops where you can earn points is limited – and unless you spend them on a Virgin branded product, it can offer poor value.

So far about 40 online stores have signed up to the points offer – but only if you spend via Virgin Red and not directly with the stores themselves. They include John Lewis (offering 2 points for every £1 spent), Boots ( up to four points per £ 1), and Marks & Spencer (two points per £1). The most generous points are available on Virgin branded services. For example, the purchase of a hot air balloon trip using Virgin Experience Days earns ten points for every £1 spent.

Virgin Red will give 15,000 points to anyone switching their bank account to Virgin Money via its website – enough points to buy half a dozen bottles of prosecco from Virgin Wines or be put towards the 20,000 points required for a London to New York return trip via Virgin Atlantic (exclusive of taxes). Alternatively, it could buy 75 sausage rolls from Greggs.

Rob Burgess runs travel loyalty website Head for Points. He says: ‘The bank switching offer is probably the best deal. The only other way to pick up lots of points is by flying with Virgin Atlantic, sadly not much of an option right now.’ Virgin may struggle to compete with other loyalty schemes because it does not offer points for supermarket shoppers. Competitors such as Nectar not only offer points at Sainsbury’s but more than 300 other stores. Tesco also offers shoppers points.

The Boots Advantage Card may not give choice over where points can be earned and spent, but it is generous. For example, you earn four Boots points for every £1 spent on its card – worth 4p when shopping at Boots.

With Virgin Red, you can earn up to four Virgin points for spending £1 via the Boots website – but its points are less valuable. For example, a £1 Greggs sausage roll costs 200 Virgin points, so each point is only worth half a penny. Helen Knapman, investigations editor at consumer website Money Saving Expert, says that although Virgin Red allows you to acquire points through 40 online retailers, you can only use the points at 20 online shops.

Only Greggs is accepting points over the counter – via the scanning of a ‘QR’ code from your phone via the Virgin Red app.

Knapman says: ‘You should not shop based on loyalty points alone – but on the money you can save.’

Those wanting to turn Virgin Red points into money off flights must link their scheme to a Virgin Atlantic Flying Club account. The main points competitor for flights is Avios, used by members of the British Airway Executive Club.

But Avios has links with more than 1,000 shops where you can collect points by shopping online through the BA Executive Club eStore.

Another popular way to collect Avios points – where one point is collected for every £1 spent – is by using a BA American Express card. Each point spent is typically worth 1p on future purchases – for flights, upgrades, hotel stays or car hire.

But Avios has extra flexibility by being linked to rewards scheme Nectar. If you collect 250 Avios points, they can be turned into 400 Nectar points. Anyone joining Virgin Red Will receive a one-off 500 bonus points on any spending before the end of July. toby.walne@mailonsunday.co.uk