Rags to Riches Part 3 of 5 – Spend Smarter With Loyalty Programs!

In the third installment of this series, I am shifting gears a little bit to talk about actually spending money.

No, it’s not sacrilegious to spend money!

At some point or the other, we have to spend money in order to live. But we can spend smarter!

One crucial ability to develop to help you get ahead is to know how to spend smarter rather than just spending more money. This way, you’ll be able to afford the things you need without spending any money, breaking the bank or going into debt.

Introducing Loyalty Programs

Today I am specifically talking about loyalty programs. Reports say that North Americans have an average of 7.5 loyalty cards while Canadians hold 13.5 loyalty cards in their portfolio/wallet. Just like them, I am part of numerous fidelity programs and I actually use them regularly.

Indeed, every year, I re-assess the programs I am a member of to check if they still fit my lifestyle. Furthermore, fidelity programs undergo many changes over the years (revamping, acquisition, consolidation, etc.). Therefore, it’s also worth it to have a closer look at the benefits, terms and most importantly, in my opinion, how the validity of points works.

Loyalty programs are a great way to spend smarter and get the most bang for your buck.

Below I’ll get into some smart ways to use loyalty program – from car rentals to buying clothes or dining out – so you can get the biggest return on investment possible and make your money go as far as possible.

Let’s look at how you can spend smarter and keep more hard-earned cash in your wallet!

First Things First: How do Loyalty Programs Work?

It’s important to know that there are different ways to accumulate points or dollars (rewards); hence my comment above about taking the time to read the specifics of the program.

Using a Bank Card Linked to a Loyalty Program

The easiest method in my experience is to pay for goods or services with a debit or credit card that is linked to a loyalty program. Indeed, most major banks have partnerships with loyalty programs. It means that when you get a credit card, you either get a membership number if you don’t have one or you can link your current membership number.

When you do this, you’ll earn a specific amount of points or cashback per dollar spend from that account. You might even get a hefty amount of points, or a special cashback rate, as a welcome bonus to the bank or the loyalty program.

Monarch Money also published a deep dive into credit cards points with easy math for you to evaluate it reward cards are actually worth it for you!

Showing The Loyalty Card Before Paying

When you sign up for a loyalty program, either independently or through a bank, you can also receive an individual loyalty card (a physical one or an e-card). This allows you, by showing the loyalty card before making a purchase at participant stores, to accumulate rewards regardless of the payment card you used.

Installing a Plugin on Your Browser

There are companies like PayPal Honey or Rakuten that will have you install their browser extension to enable their capabilities:

• These companies partner with different online stores to grant you cashback on confirmed transactions;
• The extension will signal when you’re browsing a partner’s website. So you know that you could earn rewards from shopping there;
• Last but not least, the browser will automatically find and apply coupon codes at checkout.

Best of all: no need to have a loyalty card, whether physical or electronic, and you can keep track of your transactions online.

Always Logging in Before Making a Purchase

I totally understand that we sometimes do not want to give away our personal information to a brand. Most often than not, it means that we will receive undesired communications at an untimely frequency. My recommendations are to:

• Unsubscribe if you find yourself systematically deleting communications from a specific brand or website;
• Review your communication preferences to receive only what you need and want;
• If all fails, flag the communications as spams through your service provider. We can even do that for text messages now. Ain’t that amazing?

That aside, there are clear benefits to creating a customer account on a e-commerce website that you visit often:

• You collect rewards for each purchase that you make;
• You get personalized recommendations and discounts based on your history;
• Other perks like free products (on your birthday for instance) and invitation to VIP events are non-negligible in my opinion.

Next, Choose The Right Loyalty Program

It depends on your lifestyle and goals. So you have to ensure that you’ll actually use the rewards you’ll be earning. I personally look at 4 factors:

• The level of difficulty to achieve these 3 aspects:
  • The speed at which you can accumulate rewards, i.e. what are and how many opportunities to get points or dollars?
  • The speed at which you can redeem rewards, i.e. how far apart at the redemption thresholds?
  • The structure of the loyalty levels, i.e. are the loyalty levels so fart apart that it’s impossible to graduate to the next one in a reasonable amount of time?

All 3 aspects play a big role in maintaining and/or leveling up your membership status. I then contrast them with:

• The expiry policy of points or dollars, i.e. how long do points stay valid for? Do I have to be actively earning points to keep my balance valid?
• The diversity of perks and of program’s partners, i.e. can I redeem rewards at many locations?
• The fit with your lifestyle, i.e. select the program you want to add, remove or keep in your portfolio.

I prioritize different loyalty programs depending on the season of life that I am in.

For instance, if I am traveling a lot, I’ll focus on loyalty programs that offer traveler’s benefits.

In your case, if you like being able to redeem points quickly, a grocer’s program might be better suited for you. While if you want to accumulate points slowly over time, then a program like SkyMiles would be a better fit.

Then, Redeem Your Rewards

There are several ways to spend or redeem your rewards. I’ll focus on the ones that I use but take a closer look at your loyalty programs to get a better sense of the available benefits.

• I exchange points for goods or gift cards from partners
  • With Air Miles Reward Program, I was able to gift a Samsung tablet to my nephew for free. I often reload my Starbucks account as well.
• I exchange points for additional goods or services from the company
  • With Scene+, I get free movies and discounts at their food stalls.
  • Free nights or room upgrades from Marriott Bonvoy. And many others!
• I exchange points for additional goods or services from alliance’s partners
  • This works best for major airline alliances. By sticking to one, I enjoy benefits (early check-in, VIP boarding, additional luggage, etc.) from partner airlines.
  • SkyMiles from Delta Air Lines (from the SkyTeam alliance) and Aeroplan by Air Canada (from the Star Alliance) are my absolute go-to wherever I travel to.
• I exchange points for cash at the register or a check
  • I get checks from Rakuten 3 to 4 times per year, while with Moi program from Metro I decrease my groceries bill regularly.

When you shop smartly and use your loyalty rewards for coupons, discounts or services wisely, you can spend less on what matters most!

My Own Experience in a Nutshell

I have been using loyalty programs for many years. I have been able to get for free #girlmath:

• Tickets to an NBA game (no points or dollars needed);
• Surprises, such as a spontaneous upgrade on a direct flight from Tokyo (Japan) to Vancouver (Canada) or an upgrade from a Toyota RAV4 to a Jeep Safari in Hawaii;
• A 65” LG TV – 🌞 come on somebody!!;
• Numerous Starbucks drinks and treats;
• Over $600 worth of grocery shopping checks;
• Additional hotel nights or room upgrades.