How to work out if a loyalty scheme is right for you

It’s now part of the routine when you go shopping. The cashier asks you if you have a rewards card and, if you don’t, encourages you to sign up for one “because it will only take a minute and you’ll get lots of benefits”. But will you? Are there loyalty programs that work for the customer and not just the business?

Industry expert Philip Shelper, CEO of Loyalty & Reward Co, has worked with the likes of Hoyts, Officeworks and Qantas. We asked him the questions we all think when looking at our collection of rewards cards.

How can the average person figure out if a loyalty program offers anything of value?

The easiest way is to ask the loyalty program provider what value a member receives for a spend of $1000. For flybuys this would be $5 of points. For an AMEX Platinum card it may be around $15 of points. For HOYTS Rewards it would be $100 of points.

It’s also worth looking at bonus offers. For example, the IKEA Family rewards card offers members food discounts in their cafeterias.

But how do I know if a rewards card provides a reward I want? What if I like shopping at IKEA but don’t want to eat there?

Most large programs are now moving towards offering a range of redemption options, so there’s something for everyone. It’s worthwhile deciding what sort of reward you want from a particular program then working out the fastest way to achieve that reward.

What questions should I ask when invited to sign up for a rewards card?

Firstly, what personal information am I required to provide and am I comfortable providing it? Secondly, how will the loyalty program use my information and will any of my personal or transactional information be shared with other companies? Thirdly, will I gain any meaningful value from being a member of this program?

What makes the best loyalty program? Does it depend on the type of people it’s aimed at? A travel-mad twenty-something probably wants different rewards than a pensioner struggling to make ends meet.

Yes, absolutely. The best loyalty programs offer the option to earn in multiple channels, and this is where value is maximised. Members earning points in just one channel – such as food shopping – rarely earn anything of value, especially in the supermarket programs where the return can be as little as 0.5c for each $1 spent.

So there you have it, shoppers. Next time someone tries to sign you up for a rewards card at the cash register, quiz them about the return per $1000 spent. Then decide if the reward is something you’re interested in.

Finally, work out whether you’re passionate enough about acquiring the reward to be OK with the business you’re signing up with – and possibly others – mailing, emailing and maybe even phoning you once you’ve handed over your contact details.

Keep your eye on the bottom line with these great online saving tips. Or maybe skip the loyalty card and save more at the supermarket.


Nigel Bowen


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