Ryan Remiorz/The Canadian Press
On Aug. 6, personal finance writer Barry Choi answered readers’ questions on loyalty programs, how to pick the best ones and when to walk away.
Choi recently published his top picks for banking and grocery loyalty programs in The Globe, based on ease of use and quality of rewards.
Readers asked what’s in loyalty cards for companies, what consumers should look out for in earning and redemption rules and which programs are – and aren’t – worth it anymore. Here are some highlights from the Q&A.
The best loyalty programs
What’s the best reward a loyalty program can offer?
Choi: Meaningful benefits that can really make a difference can be game-changers. For example, if you have a CAA Ontario membership, you get access to Maple – Online doctors, which can be incredibly helpful.
American Express allows you to transfer your points to partners such as Aeroplan, Marriott Bonvoy, and All Accor to name a few, giving consumers more choices. Even specific credit cards can offer great benefits. For instance, the Triangle Rewards World Elite Card (through Canadian Tire) provides free roadside assistance and the card has no annual fee.
Was there anything that surprised you when researching the best bank or grocery cards to rank?
Barry Choi: Having followed loyalty programs for the last decade, there are no real surprises, but there are a few things to note. Metro leaving Air Miles – now Blue Rewards – to stick with their own program was questionable. I get they want the data for themselves, but giving up a bigger loyalty coalition was probably not a good move.
While I love PC Optimum, they’ve mostly been doing more of the same the last few years. I’m excited to see what EQ Bank does with PC Financial now that they’ve merged.
Scene+ is also impressive because they’ve built a nice little coalition of other brands. Some readers were surprised when I ranked them #1, but when you look at their credit cards and partners, you’ll realize there’s a lot of value.
The American Express Cobalt Card.Photo illustration by the Globe and Mail/The Globe and Mail
Why did you rank Amex as the best loyalty program?
Choi: While Amex isn’t accepted at some merchants, it ranks #1 for me for a few reasons. They have the best credit cards. The Amex Cobalt is a points machine and the Platinum card has the most travel perks. The points are highly flexible, since you can transfer them to multiple airline and hotel partners. Finally, Amex allows you to use your points on any purchase at the same value. Other bank loyalty programs give you a much lower value for your points when redeeming for purchases.
Photo illustration by the Globe and Mail/photo Georgii Boronin/iStockPhoto / Getty Images
Cashback or rewards programs
Is cash back just better than any sort of points program?
Choi: It can be, if you have the right card. Two per cent cash back can be hard to beat and requires no thinking. However, you need to look at individual cards and how much juggling you want to do. For instance, the PC Financial World Elite cards offer you 3 per cent at Loblaws and 4.5 per cent at Shoppers Drug Mart, which is obviously higher than a 2-per-cent cashback card. However, all other purchases earn you 1 per cent back in points, so you need to calculate where you spend and how much you spend to determine the best value.
Devaluation of rewards and when to quit
What do you think about credit cards offering airport lounge benefits?
Choi: Lounge access is easily the most overrated credit card benefit out there these days. Every card offers it, so the lounges are all over-crowded. That said, I’m still a lounge snob and prefer it to sitting in general areas of the airport. Think of lounge access as a nice-to-have perk, but it definitely shouldn’t be the main reason you sign up for a specific card.
When did loyalty programs get so watered down?
What are some rewards programs that aren’t as good as they used to be?
Choi: Marriott Bonvoy comes to mind. They’ve made so many negative changes that the term “you’ve been Bonvoyed” should be added to every dictionary. Here’s the thing: I’m still a Bonvoy Titanium member because it’s arguably the best hotel program for Canadians.
That said, now that Aeroplan is partnered with Hyatt and Amex allows you to transfer your points to All Accor, it’s probably time for me to check out other hotel chains.
Oh, and the recent Starbucks changes were complete trash. What a dumpster fire.
With rising costs, are loyalty programs actually saving us money if prices are going up on everything?
Choi: My take is that the cost of points is already factored into prices, so while you may not be saving money by collecting them, you’re definitely losing money by not collecting them. In the end, loyalty points are a currency that can help you offset your day-to-day costs. As consumers, we need to figure out which programs or credit cards align with our lifestyle and spending to ensure we’re getting the best return.
The cost of these programs is baked into the prices. I think they should cut the programs and pass those savings to consumers via lower prices up front.
Choi: Unfortunately, these programs will never go away. Since the programs are baked into the cost, you need to collect points just to break even. By not collecting points, you’re essentially losing money. Now, if you don’t want to play their games, which is perfectly fair, a better bet would be to get a cashback card so you don’t need to worry about loading offers or meeting challenges for extra points.
Do these programs make it worth it to switch grocery stores, gas stations, etc. if I like the ones I currently frequent? What should I look for in a loyalty program that would make a switch worth it?
Choi: If there are two grocery stores within an equal distance, and one loyalty program is better than the other, then it’s probably worth switching. The same applies to gas stations, but there are also other factors to consider.
For instance, the cheapest grocery store will always save you more money than the store with the better loyalty program.
You also need to think about what points you like. If most of your grocery shopping is at Loblaws and you like PC Optimum points, it probably makes sense to gas up at Esso. It’s okay to diversify your points, but you don’t want to spread yourself too thin. The key thing is to engage in three loyalty programs – one gas, one travel, one grocery – and get to know the ins and outs so you can maximize your rewards.
