19 April 2013

Tips to Take Advantage of Customer Rewards Programs

 Do you participate in any customer rewards programs? These programs reward you for shopping with a particular company or business.

A very simple example of a customer reward program is a punch card for a coffee shop. Every time you buy a cup of coffee you get a punch. After 8 punches you receive a free cup of coffee. It doesn’t cost you anything and all you have to do is remember to get your card punched each time you buy a coffee.

A common rewards program, slightly more sophisticated than the coffee shop punch card, is Flybuys. Get your card swiped when you shop at affiliated retailers and collect points on your purchases. These points can be redeemed for fuel discount vouchers, gift cards and a variety of other goods and services.

A more advanced program might be a store credit card. You apply for a credit card at a particular store with rewards attached. Every time you buy something you charge it to the card. In return you receive reward points on affiliated items.

It’s easy to see how these rewards programs could save you money, however when they’re not used wisely, they can cost you money. The credit card, for example, if you don’t pay it off each month will cost you money in interest. 

But what about that loyalty card? How does that cost you money? Well, if you forget the card and visit the store anyway, you’re not earning anything. The card motivates you to create a habit of going to that particular store and you’re not earning your rewards if you shop elsewhere.

Tips to Take Advantage of Rewards Programs

1. Carry the rewards cards with you at all times.

2. Avoid “Credit Card” rewards cards.

3. If you do use credit card rewards programs, like credit cards that offer travel miles, make sure you pay them off at the end of each month. Don’t carry a balance – that costs you money!

4. Only participate in rewards programs that you will use. It’s so easy to sign up for rewards programs. Yet each time you do, you’re giving your personal information to another company. In the case of rewards credit cards, you’re authorizing a credit check. Too many credit checks can lower your credit score (as can too much credit.)

5. When using a rewards card, don’t assume you’re automatically getting the best price. It still pays to shop around. For example, you may be using your supermarket card and earning rewards points, but still paying more for groceries than if you’d gone to another supermarket. Reward programs don’t always translate into the least expensive option.

Rewards programs can be a great way to save you money. However, they must be used wisely. Compare prices. Don’t carry a balance on credit cards and carry your cards with you at all times.

1 comment:

  1. I know this was a while back but I've just read one of your books and am wandering through the blog, working my way backwardsish.

    We're trialling the Flybuys Mastercard - there was a no annual fee offer when I signed up and we use it mostly for bills and pay it off each month(so far!). It's been working pretty well, there are enough points at least once a month for $10 of the shopping at Coles, once a fortnight lately, due to billing cycles. Not sure if we'll keep it longterm but it's been very easy to use and manage so far. It certainly helped spread out the Jan/Feb-all-the-bills-arrive-budgetsuck out a bit and the subsequent discounts at the register in March were very much appreciated.


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