Is joining loyalty programs worth it?
Two young women shopping at a retail store

Loyalty programs have been around forever, and it’s not surprising why consumers love them. You earn rewards on every purchase you make, and once you’ve earned enough points/miles, you can redeem them for free merchandise or travel. Sounds like a win-win scenario for you, right?

Not exactly – every loyalty program is different. What you actually get out of it may not be worth it. To complicate things, it seems like every retailer, bank, airline, etc. has its own loyalty program, so which ones do you join?

While some loyalty programs offer incredible value, you need to ask yourself a few questions before signing up.

What do I get out of it?

As weird as it sounds, there are some loyalty programs out there where you don’t actually get any value out of it. For example, some only give you minor benefits such as 30-day returns, eReceipts, and shopping tips. That’s hardly worth giving up your personal details and purchasing history.

The good thing is that most loyalty programs reward their members with actual merchandise, travel points, discounts and more, so it’s usually worth signing up. That said, you want to be strategic about your loyalty programs and try to stick to just a few so you can accumulate points quickly.

How long will it take me to get something?

Earning points is excellent, but you don’t want to be stuck in a program that takes years to redeem anything of value. It’s always important to look at the earn and redemption rates to see what you can actually get.

When it comes to airline loyalty programs, it’s always worth joining them, but the details of the program may influence which airline you choose. Some top airlines will give you points, but it can take some time before you earn enough miles for a free flight. With other airline programs, you only need a certain minimum balance to make a redemption, which is appealing to many people.

As for hotels, you want to try and stick to one chain since their programs give you additional benefits the more nights you stay. Look for loyalty programs with many properties worldwide – one chain will give you a free night for as little as 5,000 points.

Are there ways to earn more points?

The base earn rate for any loyalty program is typically reasonable, but if you really want to get the most out of your rewards, you need to see if it offers any additional ways to earn more points.

Many retail loyalty programs will have events where you can earn additional points. Saving your shopping for these dates can definitely work to your advantage since you’ll be able to boost your rewards.

If you really want to turbocharge your earn rate, see if any credit cards line up with your spending and your chosen loyalty programs. For example, many of the best travel credit cards in Canada are either tied to a specific loyalty program or gives you flexibility with your points.

Do my points expire?

There is no worse feeling than finding out after years of saving, your points/miles have expired. This happens more often than you would think, which is why you need to find out if there is an expiry date for your points.

Generally speaking, your loyalty points/miles will expire after 12-24 months if there’s no account activity. This may sound like a pain, but as long as you’re earning or redeeming points at least once in that period, you can keep your account active.

Alternatively, you may be able to donate some of your points or make a small purchase through their estore to keep your account activity going. Either way, make sure you’re signed up for your loyalty program’s mailing list as they’ll alert you if your account expires soon.

What is the best loyalty program?

The best loyalty program really depends on where you shop regularly, what type of rewards you like to earn, and your goals.

If your grocery store offers a loyalty program, it makes sense to join it since you’ll be shopping there anyway. Combine that with a credit card that gives you extra points on grocery purchases, and you’ll see your points balance increase fast.

Now let’s say you’re a frequent traveller – look for a card that can grant you extra travel benefits including lounge access, hotel status, travel insurance and more.

Final thoughts

Joining loyalty programs are worth it as long as you’re getting value out of it. Instead of joining every one available to you, choose 3-4 and concentrate your spending on them to maximize your earnings potential. Don’t forget to cash in those points or miles from time to time, so you can reap the benefits.

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. As a completely self-taught, do-it-yourself investor with no formal training, he makes money easy to understand for all Canadians. His specialties include personal finance, budget travel, millennial money, credit cards, and trending destinations.

Barry Choi is a paid spokesperson of Sonnet Insurance.

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