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Loyalty Cards: What's The Point Of The Points?

Chasing the dream of an overseas trip based on earning points while shopping with a loyalty card can be an exercise in futility, according to independent research by a leading New Zealand consumer organisation.

Better value is often found in a card which gives you smaller, but more frequent, rewards based on points which never expire - the principal gripe of flight-seeking card users.

For instance, on a spend of $12,000 a year, using a Fly-Buys card without a credit card would take four years to acquire enough points for a trip to Sydney. But the points expire after three years, the research showed. In fact, flights only account for 15% of rewards claimed on Fly Buys.

Commenting on the research, the Automobile Association says its AA Rewards card - at 801,753 holders it is second to Fly Buys' 1.4 million - has established itself as a popular alternative to some of the major loyalty cards whose signature lure is the prospect of a 'free' flight.

"For a start," says AA Rewards' general manager Pamela Lawton, "membership is incorporated in the AA membership card so there's no application form; rewards are issued automatically so there's no need to register a claim for them, and the points never expire."

AA Rewards are issued as $20 vouchers based on points earned by shopping at a wide range of partners, including BP service stations, and by on-line shopping at the likes of Woolworths supermarkets, Farmers and Dick Smith Electronics. "Vouchers not spent at partner outlets can be used to reduce AA subscription renewal, so every point pays," says Pamela Lawton.

"We're pleased the independent research, which examined 17 loyalty schemes, was able to highlight the benefits of AA Rewards."

-End

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