Is it time to ditch loyalty schemes? We reveal the ones worth keeping in your wallet
With hundreds of different loyalty cards out there, we investigate which ones are really worth keeping
MILLIONS of Brits have at least one loyalty card in their wallet and most of us have three or four.
But between data privacy concerns, worries about hacks and regular reductions in benefits - are they really worthwhile?
What stores get out of loyalty cards
Most loyalty cards offer to give you rewards such as discounts, freebies or perks in return for you spending your money in a specific store.
In an ideal world, retailers hope that by giving you rewards you'll keep coming back and spending money.
As well as your custom, retailers also ask you for a lot of personal information. This includes basic things such as your name and where you live, but they can also keep more niche data including how often you shop online and whether you're pregnant,
This data is incredibly valuable to brands. It helps them design everything from their marketing and offers to how stores are laid out and how much semi-skimmed milk they stock.
How to find out what brands are doing with your data
BECAUSE of GDPR, every brand has to tell you what data it has and how it is using that information.
If you look through the terms and conditions of any loyalty schemes, they will detail what kinds of data the retailer has, what it plans to use it for, who it might be shared with and how long it will be held.
For instance, on the Co-op's membership terms and conditions it says it keeps data:
- To improve services
- For statistical analysis
- To personalise offers
- To prevent and detect crime
- For dealing with legal claims
- To send direct marketing - if you have given consent
This information is generic, but under GDPR laws you have a right to ask what specific data a company has about you as well as how they have obtained it.
You also have the right to ask for your data to be deleted
But it's not without its risk for consumers. One worry is that if a store is hacked, fraudsters could get access to your personal information.
Many people are also worried about privacy and feel uncomfortable with the idea of retailers knowing so much about them.
The good news is that GDPR means there are very strict rules about what a brand can and can't do with your data. If they've obtained it through a loyalty scheme, they can use it for "legitimate business interest" but they have to be very careful about how they store it and how long they keep it for.
Businesses that are found to be sharing data they shouldn't with other organisations or not keeping it securely can be charged enormous fines, so companies should be being very careful with your information.
They may share it with third-parties, particularly regulators, government, credit reference agencies, other companies they own and advertising partners.
When loyalty cards might be worthwhile
If you're worried about sharing information with big brands, then loyalty cards are probably not for you.
But many of us are happy to trade some information in return for offers, freebies and discounts.
The trick to making sure that a loyalty card is a good bargain, is to make sure you ignore the loyalty part.
If you're deciding where to shop because of the points - you're almost certainly not getting the best deal.
Shopping around almost always saves you more money than deals do.
Which supermarket loyalty cards are worth keeping
Most of the supermarket loyalty schemes are worth keeping as you'll often get vouchers or money off your shop.
They tend to be free so having a card for all the stores you use regularly means you'll soon start to see the benefits rolling in.
That said, many of the major supermarkets have made changes to their schemes recently, making them less valuable than they used to be.
This may make you question whether you're getting enough benefits in return for your data. It's also another reason why shopping around is your best bet.
How loyalty programmes have got less valuable over time
MANY supermarket loyalty schemes are less valuable than they used to be.
Sainsbury's
When Sainsbury's first announced its partnership with Nectar back in 2002, you earned two points for every pound you spent. Now you only get one point per pound spent.
Points are generally worth half a penny (though you can usually get a better deal if you swap them for rewards).
This means for every £500 you spend, you get £2.50 now when you would have got £5 in the past.
Tesco
Tesco has always offered one point per pound you spend. Each point is worth a penny, so you get £5 every time you spend £500.
You get more value if you swap the points for rewards, but Tesco has made the deals less good over time.
The supermarket also annouced is severing ties with 57 of its Clubcard partners including Halfords, HMS Belfast, Cutty Sark and Leger Travel.
Waitrose
Waitrose launched the MyWaitrose scheme in 2011. This gives members a free tea and coffee in store as well as access to 20 per cent off offers. The scheme used to let you pick ten items to always get 20 per cent off, but this was scrapped this year as Waitrose said shoppers found it too confusing.
Morrisons
Morrisons pays five points for every £1 spend in store. Each point is worth 0.1p, so you get half a penny for every pound you pay. That means if you spent £500 you'd get £2.50.
The value of the points hasn't changed since launch, but the supermarket did drop its price match guarantee which meant you got extra points if you could have got your shopping cheaper elsewhere.
It has also recently slashed the number of points customers can collect when buying gift cards by 80 per cent.
Hannah Maundrell, editor-in-chief of money.co.uk commented: "We’ve seen so many loyalty scheme shake ups this year it’s hard for anyone to really know what they’re getting anymore.
"Loyal customers have been up in arms as most of the schemes have changed for the worse - [such as] Waitrose removing their pick your own offers and Tesco [getting rid of its] brand guarantee."
The best and worst supermarket loyalty cards
Sainsbury's, Morrisons and Tesco are all useful cards to own. You accumulate points which give you vouchers or money off.
The Waitrose card is also handy if you're a regular shopper as it gives you access to 20 per cent off deals.
The Co-op scheme costs £1 to join but you'll earn five per cent cashback on own brand products. You also get access to deals from other Co-operative Group companies.
The M&S card probably isn't worth keeping if you only shop there for food, since most of the offers and deals available are for clothes and furniture.
Think carefully about the Iceland card, as you have to load money in advance onto a card that can only be used in store. You'll get bonuses, but you don't want to get caught out of pocket if you transfer cash onto the card and then need it for the weekly shop elsewhere.
Make sure you're not tempted away from less costly retailers because of loyalty cards. Aldi and Lidl don't offer loyalty programmes, but often they're the cheapest way to shop.
Here's how to cut the cost of your grocery shop
SAVING on your shop can make a big difference to your wallet. Here are some tips on how you can cut the cost of your shopping bills:
- Write yourself a list – Only buy items that you need. If it isn’t on your list, don’t put it in the trolley
- Create a budget – Work out a weekly budget for your food shopping
- Never shop hungry – you are far more likely to buy food you don't need if your tummy is rumbling
- Don’t buy pre-chopped veggies or fruit – The cost loads extra
- Use social media – follow your favourite retailers to find out about the latest deals
- Be disloyal – You may want to go to different stores to find the best bargains
- Check the small print – It’s always worth checking the price per kg/lb/litre when comparing offers - a bigger box doesn't always mean better value
When it's worth joining a flying reward programme
Some airlines or credit cards offer airmiles when you book flights or spend money. You can use the miles to get money off future travel, though there are usually limitations on which flights you can book.
If you’re using an airline’s rewards programme, you may also get other bonuses like early check-ins, early seat allocation and even access to lounges – if you spend enough.
They’re good for people who use their credit card a lot or travel frequently (although only if you favour one airline), but usually you’ll end up spending more than you get back in points.
Is it worth picking a credit card which gets airmiles?
FOR most people, credit cards that accumulate airmiles are not the best choice.
That's because they usually have higher interest rates.
Most people would be far better off with a card that has a 0 per cent balance transfer or 0 per cent purchase offer.
If you do decide to pick a credit card for its airmiles, make sure you pay off the balance each month, otherwise you’ll pay more in interest than you get back in rewards.
Which airline cards are worth keeping?
Generally speaking, it's worth keeping all of the airline cards that are free, as you'll accumulate points as you spend. It will take a long time, but eventually you'll be able to treat yourself to a free (or heavily discounted) trip.
But if you're booking a flight through an airline you're unlikely to use again, it's probably not worth the hassle.
Even where you do join a programme, you should never book a more expensive flight just for the extra airmiles - you won't make back what you spend.
Three schemes worth joining are the British Airways Executive Club (which is absorbing Avios), the Virgin Miles reward scheme and Norwegian Air’s new loyalty scheme.
Both BA and Virgin have extra benefits because you can also book reward flights with their partner airlines.
Which coffee chains and restaurant reward schemes are worth keeping
There are plenty of reward schemes for those that eat and drink out a lot.
Generally speaking, you have to spend a lot of money to get anything free with one of these cards. For instance, with Costa you have to spend £35 just to get a free tea.
At Subway, you’ll have to spend £100 to get a free six-inch sub worth £5.50.
And even with the hugely popular Nando’s card you need to spend £70 to get a free ‘red’ reward, which will get you a whole chicken or a large main meal.
But even though it takes a long time to build rewards, it's often still worth joining up because the cards are free.
After all, a free chicken burger is still a free chicken burger, even if it’s only once a year.
There are two main things that should determine whether a scheme is right for you.
The best cards will be for restaurants or chains that you tend to visit regularly or schemes which offer rewards for the lowest spend.
We'd recommend the McCafe loyalty scheme where you get a free coffee for every six you buy and the Papa John's one where you tend to accumulate a few points each time you order, meaning rewards come round quickly.
It's also worth getting cards where you can get points from lots of different retailers, such as the ICE scheme. You can earn these points on top of other loyalty programmes, so you might end up with double rewards.
A better way to get restaurant rewards
Consider signing up to newsletters from your favourite restaurants. Byron Burger regularly offers its fans freebies and both Pizza Express and Strada will give you a free bottle of Prosecco on your birthday.
Often, the deals and freebies you get will be even better than those with a traditional loyalty scheme.
If you're planning to sign up to a few, it might be worth setting up a separate email address so your regular one isn't filled with promotional mail.
Apps are another great way to get freebies. KFC and Gourmet Burger King both offer rewards for fans who have the app on their smartphone.
MORE ON MONEY NEWS
If you want to de-clutter your purse, there's a free app that will store all of your loyalty cards in one place.
Whether you have a Tesco Clubcard, Sainsbury's Nectar card, Costa Coffee Club card or myWaitrose card, the free Stocard app will hold them all in a virtual wallet.
What you need to know before signing up to any reward scheme
THERE are thousands of different loyalty schemes and reward cards available - so you need to make sure you know what you're signing up for
- By signing up for a loyalty card, a retailer will get a lot of information about you and your shopping habits. The data might be shared within its group of companies to target you with offers and advertising.
- If a firm goes bust, you will lose your points, which have no cash value. Hoarding points also means you risk losing them if a retailer or restaurant shuts your account after a long period of inaction.
- Read the terms and conditions carefullly some retailers and restaurant will have expiration dates on certain offers (for example you might have limited amount of time to spend your extra points).
- Don’t choose where to shop or where to eat based on a store’s loyalty scheme. If there is a particular item you want, shop around rather than head straight for the retailer where you have a loyalty card. In a restaurant check some of the special deals or menus - they might be better value than the loyalty scheme.
- Beware of spending more simply because you have a loyalty card and don’t buy something just for any bonus points you may earn.
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