Loyalty Cards: What to Expect

The Rewards

Most of us pay little attention to what we earn from different loyalty cards. But the schemes vary greatly from retailer to retailer. Tesco, for example, gives one point for each pound spent, with each point worth 1p. Boots Advantage card offers four points for every pound spent, and once again each point is worth 1p. But shoppers who are keen supporters of particular retailers have nothing to lose from these schemes and can benefit from special deals where points can be doubled or trebled. The main problem with loyalty schemes is that many people fail to cash in their points, especially if there is an expiry date attached.

In some instances the reward scheme is linked to a company's credit card, such as with Mark's and Spencer or British Airways. The former offers rewards in the form of vouchers, whilst the latter gives a reward in the form of air miles for using the card (some other loyalty cards offer you the chance of redeeming your reward in the form of accumulating air miles).

Loyalty cards have brought rewards to the companies issuing them, too. Shops have found that their sales have increased from loyalty card users, which translates into increased profits.

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The Downside

When you use a loyalty card you're giving the retailer a great deal of information about yourself. The till receipts offer a huge insight into your buying habits. But it goes deeper than that. Analysts can determine whether you're employed or not, the age of your children, even whether you're preparing to go on holiday. The amount of information that can be easily gathered can be quite scary.

You give them plenty of information when you apply for the card, and they build on that every time you swipe your card. However, everything they do is perfectly legal within the provisions of the Data Protection Act. See the related article Using the Law to Protect Your Information

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Redeeming Your Points

It's all very well using a loyalty card, but you also have to claim the benefits they offer. According to one study, up to a quarter of people don't claim the benefits they earn. In 2003, for example, there were £413 million in unclaimed loyalty card benefits.

Consider having loyalty cards for all the stores where you generally shop. It can take a while to accumulate any vouchers, and yes, you'll be giving up a lot of information about yourself, but you will gain vouchers for the money you spend.

With Tesco ClubCard, for example, although each point might be worth 1p, if you use them for ClubCard deals, they're worth four times that amount, so look beyond the immediate cash value of the voucher and consider using them for hotel deals, for example. If you've thrown away your vouchers, contact the retailers, and they'll almost certainly reissue them if you can give your card number.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Car Purchase Rights Checker lets you bought a faulty car? Find out exactly where you stand legally. Takes 1 minute. Try it now →