Changes to loyalty programs are often deeply unpopular with members, who quickly and loudly bemoan the program’s devaluation. And while program devaluations are irritating, you can make the best of a bad situation by tweaking how you earn and burn your rewards.
Pay attention to the details
In the wake of changes, savvy consumers could look for the sweet spots where there have been positive developments.
For example, many people swore off Air Miles when they lost Metro, Sobeys, LCBO and Rexall as partners. However, under the new Air Miles, Pharmasave is now a partner and credit-card holders earn double the miles at any eligible grocery, liquor and wholesale stores.
There’s also the American Express Cobalt Card – at times referred to as Canada’s best credit card. Just recently, they announced that cardholders will earn one point per dollar spent on travel purchases as of Oct. 8, 2024, down from two points.
While this devaluation is disappointing, consumers should focus on food and drink purchases since they still earn you five points per dollar spent. What you could do is buy gift cards at grocery stores for other merchants that earn you fewer points. For example, using your Cobalt Card at a gas station would normally earn you two points per dollar spent, but if you were to buy a gas gift card from a grocery store, you earn five points. I’ve even seen Airbnb gift cards available at grocery stores, so it’s possible to earn additional points on some travel purchases.
Make your redemptions matter
One of the most important things you should do with any loyalty program is to earn and burn your points as quickly as possible. Hoarding your points for a potentially bigger redemption can backfire since loyalty programs have regular devaluations, and your points or miles could expire if you don’t engage in any account activity.
Even when devaluations do happen, consumers should always focus on what’s valuable for them now. For example, Aeroplan members have recently found that the number of points required for a business-class flight can far exceed what’s listed on the Flight Reward Chart. While this is normal during high-demand periods since Aeroplan uses dynamic pricing, it’s getting out of hand. A flight that’s about a year out should not be showing peak pricing when not a single seat has been booked.
To circumvent this, Aeroplan has 45+ airline partners that use fixed pricing, so finding a low-cost redemption is possible. The problem is that these partners only offer limited availability, so securing a seat can be hard. An alternative solution might be to simply book economy seats, as the value of your redemptions can still be good.
Another popular program where it’s easy to get increased value for your points is PC Optimum. Many people will rightfully point out that Shoppers Drug Mart can be expensive, but their quarterly bonus redemption events are excellent since you can usually redeem 50,000, 100,000 or 200,000 points for $65, $140 and $300 off, respectively. That’s an increased redemption of 30 per cent, 40 per cent, and 50 per cent, respectively, compared to the usual $10 for 10,000 points. And they can be higher during some promotions – such as Black Friday.
As much as people like to complain about points and miles’ lower values these days, no one seems to mention that there can be better opportunities to earn and redeem your points.
Get to know your loyalty programs
According to MarketSense Inc., the average Canadian participates in 7.5 loyalty programs and is active in 4.9 of them. That seems like a reasonable number, but with loyalty programs constantly changing, it might still be a bit much.
It’s in the best interest of consumers to get to know two to three loyalty programs inside out. Usually, that would be a grocery, gas and travel program. You can earn points quickly by having a co-branded credit card, knowing who its partners are, and taking advantage of bonus offers. On the burn side, you want to target any high-value redemption or stretch out your points to give yourself access to more rewards.
Loyalty programs are now designed to give the best value to actively engaged members. If you’re paying attention to program changes, you’ll likely find adjustments that can benefit you. The alternative is to sit on the sidelines, but that just guarantees you’re losing out.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with Air Miles, Aeroplan, American Express and PC Optimum but currently has no relationship.
