Saturday, October 23, 2010

Corporate Rewards Programs: Not All Created Equal

My husband came home with a code for Hood cottage cheese rewards after a trip to Stop and Shop last week, which is right about when I discovered that the corporate rewards world had hit oversaturation.

When I first began to collect airline points, shortly after moving to Cambridge in 2005, I set a goal for myself: I would know I was doing a savvy job juggling points programs if I could fly for free once a year. Alternating Aeroplan miles, Aadvantage points and Bank of America rewards points, I have basically made that goal and flown for free or almost free four times. We also now have enough points for at least one free flight in the winter or spring.

Once upon a time, the rewards program world was a small one: airlines, credit cards, and that was about it. In Toronto, my father would make sure to pay Canadian Tire (like a smaller Home Depot) in cash so he could get his Canadian Tire money - literally, fake money that you could use at the store. These programs were particularly valuable to us, and I learned from him that it made sense to consider where you were buying, how you were paying, etc. so you could work all the angles and get the most rewards. If only all rewards programs that later sprang up were that straightforward and easy to use.

I got into survey-based incentive programs early (I've been doing e-Rewards for almost five years). When I joined, it was sponsored by Aadvantage, and I once got 1000 Aadvantage miles from them for the many surveys I had taken. A year or so later, a $50 gift card to Starbucks showed up in the mail. I was following, of course, the cardinal rule of rewards programs: they are only really valuable if you can use them to get things for free that you would have paid money for otherwise. Since I make it my goal to underspend my coffee budget and put the excess right into savings, and since I was never intending to miss my grandmother's 75th birthday, both rewards directly saved me money. There are many other programs whose email updates I've received, or who I've tried out, and none have delivered the way e-Rewards has. Not everyone is such a fan, though, including me two years later. They only gave out Starbucks gift cards for a really short time and they discontinued their partnership with American Airlines a while back. I now get rewards and don't know what to use them for. I've got too much credit to allow to expire, so I get magazine subscriptions, fill out the occasional survey and hope for better rewards in the future. But the time I spend on a site like theirs is directly proportional to the value I expect to get out of it going forward; in the case of e-Rewards these days, I'd say that both of those are "almost none."

You can't always tell at first if a rewards program will be good for you. I was passing along Coke points for My Coke Rewards to my brother-in-law for the longest time before we decided we could probably use it to our advantage. I admit, I have never been an early adopter, so though my sister-in-law sent me an invitation to Swagbucks in November '08, I didn't sign up until January 2010. Swagbucks seems to me to be in the same category as MyPoints, where the best benefits come to those who buy things and "participate" in "special offers" - read: buy things - but I regret not signing up 14 months earlier for Swagbucks. One of my favorite mommy bloggers, Chief Family Officer, calls it her favorite way to make free money, and I have come to agree since it only takes me 2ish months of >1 minute a day of investment and I get a $5 Amazon gift card effectively for free. Since the advent of Amazon's "Subscribe and Save," I've been buying certain groceries online, and this knocks down the price. (In one memorable transaction, I got 48 Timothy's K-cups for $2.21.) But I have no use for MyPoints. I am pretty sure I've been a member for longer, but I have never received a tangible benefit.

We all have a calculus of how much finagling and tracking is worth our time. I am of the mindset that if you wait to buy something until you absolutely need it, you'll probably pay too much. This has its reasonable limits - such as non-pregnant people buying maternity clothes - but is certainly true for things that one will use eventually, like toothpaste and toilet paper. If you're careful with coupons and savvy about ExtraBucks, you can get these items for a fraction of their original price (and sometimes even "make money" in the form of ExtraBucks) when you buy these things at CVS. I avoid making myself crazy, though, by sticking to one store, so I ignore Walgreens' parallel Register Rewards program. There are normal human limits.

It's a lot easier in this day and age to stretch a buck. Coming from Canada, where there are fewer consumers and less attractive programs, I am always appreciative of the ease of finding good sales, cheap shipping, coupons and coupon codes, and online shopping portals. (I use Ebates and Bank of America's Add it Up, though I prefer Ebates.) I like feeling like my loyalty and patronage are rewarded, that I am saving money I might otherwise have spent, and that I am doing my utmost to keep spending down so I can build a nest egg for the future. The road to financial security seems to sometimes be filled with useless rewards programs, and I occasionally think that the energy I put into something (like the Tropicana rewards program) has been completely wasted.

The fundamental theorem of corporate rewards programs seems to be simple: Their goal is to get you to spend more money than you initially intended, a larger fraction of your shopping budget there than elsewhere, and to get you to "come in" (in-store or online) for something cheap and wind up buying something expensive as well.

But who is to say that any of this is not to your advantage?
The math is simple. If:
Benefit to you > cost to you (especially if you would have spent the money anyways,)
It is worth your time.

That being said, there is some saying about needing to kiss a lot of frogs to find a prince, so I recently signed up for Hood Cottage Cheese rewards and Pampers Gift to Grow (since I'm hoping to have a lot of points before the baby is born so that we can reduce our inevitable spending by using rewards.) Though I ought to spend the rest of the evening doing work, my husband just walked into the apartment with my new issue of Conde Nast Traveler, to which I got a free subscription through e-Rewards. On the cover? A text box advertising "How to Save a Bundle: 15 Magic Web Sites."

I suppose I'll kiss a few more frogs.

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