By James Bow

Am I the only one confused by all the customer loyalty points cards that are out there?

It started with Air Miles, who neatly put together a discount plan to encourage people to travel more. With the miles you travel, you collect more ‘miles,’ which you can apply to a free trip. But Air Miles didn’t stay with the airlines. I can get Air Miles just by by buying 50 feet of lumber at the local Rona and 25 Air Miles is enough to earn me two free tickets to a local movie theatre.

But are these cards worth it? When drug stores and supermarkets set up their own points card programs, I was intrigued. I shop at these stores frequently, and it’s not much of an inconvenience to whip out one of these cards when asked and have it scanned. If I’m going to be shopping at these stores anyway, why not collect the savings?

What I would be giving up, however, was privacy. I had to fill in my name, address and phone number, and the cards would record exactly what I purchased at the store. It’s one thing to allow a credit card company access to that knowledge, but now every store seems to want that information, so they can more effectively advertise at you. Such information has, in other circumstances, fallen into the wrong hands.

I also did the math. With one drugstore’s loyalty card, you earn ten points for every dollar you spend. That’s nice, except that you don’t start saving until you collect 8,000 points, at which point you save $10 off your next purchase. To get those 8,000 points, you need to spend $800. A $10 savings off of $800 is 1.25 per cent.

That’s a far cry from your half-off sales, or even the buy-ten-get-one-free that simpler customer loyalty programs offer. Points seem an effective means for stores to hide just how little savings they are giving you through these programs.

To be fair, their savings structure is tiered. If you gather 95,000 points (spending $9,500), you save $170 (a 1.79 per cent savings), and there are special days where the points you earn are multiplied by ten or even twenty. If you shop only on those days, you can earn an impressive savings rate of 35.7 per cent. This has affected my shopping trips to that store, as I put off purchases until those days when the multipliers come into effect.

One supermarket chain, on the other hand, is positively tight-fisted. In their program, you earn a point for every dollar spent. Spend $725, and you save $5 off your next purchase, a savings of 0.69 per cent. There are specials where certain products come with bonus points, but no dates when multipliers come into effect. As customer loyalty programs go, I wonder why they even bother.

You have to understand, however, that these businesses aren’t in the business of giving stuff away. If they were, they wouldn’t be in business for much longer.

If you are considering joining one of these customer loyalty programs, do the math. Compare how much you get in return against what you must spend to get it. Now consider that you need to sign up for these loyalty programs and give your personal information away.

If the savings are worthwhile to you — if you often shop at a particular store anyway — and you don’t mind having the company know your business, then by all means sign up. But if you are only an occasional visitor to the store, or if you care strongly about your privacy, you may want to think twice.

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James Bow is a writer and father of two in Kitchener.
You can read more about him at http://bowjamesbow.ca