Loyalty Cards - Best Practices

Recently I was discussing loyalty cards with a group of people and I was saying how much value I receive from mine. Last year I was able to purchase several birthday presents and more than half of my Christmas gifts with the points I had earned on my Shoppers Optimum Card. Somebody else mentioned how they had a wallet full of these cards and just found them a nuisance. I can certainly understand that. Spreading the spending over that many cards would mean seldom accumulating enough points to make any of them worthwhile. Not much profit or fun in that. It makes a lot more sense to choose just one or two of them and learn to maximize their value.

So I guess that’s where I start – with my Shoppers Optimum Card. This card is good only at Shoppers DrugMart and to get true value from this card it should be used to purchase products when on sale. Paying full price for products offset the benefits received. While I find Shoppers' regular prices to be on the high side, they do offer great sales on things like milk, butter, cream, eggs and peanut butter, bacon, and many other everyday needs.
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There are five Reward Levels with Points Valued at:
8,000 points worth $10.00-----22,000 points worth $30.00----38,000 points worth $60.00----50,000 points worth $85.00----95,000 points worth $170.00
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When you first look at the terms of this card, chances are you’re not impressed.  You receive 10 points for every dollar spent so to reach the first points redemption level of 8,000 points (worth $10.00 off purchase) you would need to spend $800.00. Doesn’t sound like such a great deal. But watch how you can quickly  increase the value:
For the first 3½ months of this year (2013), Shoppers offered the following promotions:  

• 18,500 points (worth $25.00) for spending $75.00 or more on almost everything in the store.  This promotion was offered on Jan.19-22, Mar.2-4, and Apr.13-16.

The goal here is to spend between $75.00-$80.00 (pre-tax) because the or more means that no matter how much more you spend, you will receive only the 18,500 points. However, if you need enough sale products to make up a second $75.00, then simply run each $75.00 worth of purchases through as a separate entry. That way you receive 18,500 points for each entry, doubling the points (or more, depending on the number of $75.00 entries).
If you know that you're not going to be able to meet a second $75.00 purchase level, then consider prioritizing the shopping list, putting the most needed products at the top and the ones that could wait a bit at the bottom of the list. That way, once the $75.00 has been reached, any of the remaining items could be put on a waiting list for the next promotion.

During a recent 18,500 points promotion, I purchased groceries having a pre-sale price of $139.60  with the actual after-sale price of $84.06 - amount saved $55.54. Adding the $25.00 value of the 18,500 Bonus Points increased the savings to $80.54. 

• Spend $50.00 or more and receive 20x Bonus Points.  This promotion was offered on Feb. 2 and again on Mar. 23. This is a good time to stock up on needed sale products because the 20x Bonus Points is applied to all eligible products, so the more you spend, the more bonus points you receive.

In addition to the main promotions, it also pays to take advantage of in-store promotions because there are many product and department promotions that work to increase the point earnings even more as shown below:

On a 20x points day I spent $89.98 on needed sale items. In addition to my 890 regular transaction points, I also received 550 product bonus points, 5320 department bonus points, plus the 16,910 transaction bonus points for a total of 23,670 points, valued at more than $30.00 (22,000 points = $30.00) thereby significantly increasing the savings. 

Not too long ago, Shoppers joined with RBC to offer a couple of additional ways to increase points.

1. RBC Shoppers Optimum Banking Account. The upside -For opening the account, you receive an initial 50,000 points and then double the points (20 points for every dollar spent) for eligible in-store purchases using the debit card. The downside- Monthly fee of $10.95 or $131.40 per year which is equal to the redemption value of more than 80,000 points. I passed on this as I didn't like the idea of giving my points away just to pay bank charges.
2. RBC Shoppers Optimum MasterCard. This I like. Earn 15 additional points (25 points for every dollar spent) for eligible in-store purchases using the credit card. To use this card, you need to be a disciplined credit card user so that the card never carries a balance as that would be charged at 19.99%, which would more than offset any benefits.

Redeeming Points. Once a reward level has been reached, the points can be redeemed for payment towards purchase, but here again you want to stay as close to the redemption value as possible. For instance, if you redeem 22,000 points for $20.00 worth of merchandise, you're losing out on $10.00 worth of free stuff because the difference between the purchase amount and the reward value will not be given in cash. Its much better to buy $35.00 worth of goods and pay $5.00 out of pocket. That way you get the full value of the rewards.
Spend Your Points. With these promotions the value of the rewards increase. On Mar.9&10 and Apr.6&7 you could redeem 50,000 points for $100.00 off purchase (instead of $85) and $200.00 off purchase for redeeming 95,000 points. (During these events, the promotion only includes the redemption amounts listed, in this example, 50,000 or 95,000 points.)
Other Promotions:
Jan.24 - Senior's exclusive spend your points - 22,000 points = $38.00, 38,000 points=$75.00
Feb.9-11 - Spend your points on cosmetics, skin care, hosiery, fragrance, jewelry, etc- 40,000 points=$90.00 and 80,000 points=$200.00
Feb.23-Mar.1 - 20X the points for spending $75.00 or more on cosmetics, skin care, hosiery, fragrance, jewelry, etc.
Christmas Spend Your Points Promotion, Dec. 1& 2/12. 38,000 points = $70.00, 50,000 points = $105.00 and 95,000 points = $210.00.

There are many more promotions and ways that will increase points earned but its impossible to list them all here.

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For more ways to save money, click on the link below and check out my e-book.
Frugal for Everyone - Cutting the Grocery Budget.