Frugal Shopping and Customer Loyalty Programs

March 3, 2020
Consumer Loyalty Programs and Frugal Shopping

I decided to do some extensive research, albeit not scientific,  on all the customer loyalty programs I signed up for over the years. The ones that give me back a return that provides real value and follows my frugal shopping rules are my travel, grocery, fuel, and of course CVS rewards.

I started by reviewing a years’ worth of bank and credit card statements to determine where I’m spending, then looked at my loyalty program accounts to see how much I received in perks or rewards. And what do you know, I received very little in return for my efforts and money.

Remember, marketers are masters of psychology and know exactly what buttons to push and words to use to make you think you’re getting something for nothing.  Financially, retailers and marketers also know at what point to offer a reward, I’ll bet most people don’t spend enough to get the rewards in the first place. We as consumers are not selling our information, we are giving it away for free.

One of the ways businesses get you to sign up for their programs is to make you feel special. The operative word is “feel special”.  Marketers want you to believe you are part of a group of smart people who spend wise, by signing up and saving money, I call BS here.

Do a little research

  • Go through your emails and make a list of all the loyalty programs you have signed up for.
  • Next, review your bank statements and credit cards and tally up the amount you spent at these stores.
  • Next, log in to the loyalty program website and review how many rewards you actually received.
  • Now, this is the part that’s going to be different for every, you need to determine the value to you. How many emails to get and just delete? How much time do you waste sorting through the junk mail?
  • Lastly, unsubscribe from the emails.

An example

At Sephora, you can be a Beauty Insider, VIB Insider, or Rouge. What’s the difference? Even if you spend $10 you can be a Beauty Insider, but wait, spend $350 to be a VIB, spend $1000 in a year and your Rouge. Let’s say you spent $300 at Sephora in a year to buy all your goodies, but wait, the year is coming to a close. Spend another $50 on something you don’t need then Viola, you are a VIP for a whole year! Now you’ll get an extra 15% off once a year for a two-day time-frame, that’s not all that special, is it.  Nobody knows or cares if you have Beauty Insider, VIB or Rouge status,  and nobody except the marketers.   Repeat “I don’t need another mini mascara or cleanser packet”.

Looking at my Sephora purchases in December, I was about $50 away from the next tier in the loyalty program, so I bought into the hype and decided to buy a new perfume, one I in no way needed.

I have a ton of loyalty reward accounts ranging from Anthropologie to Urban Outfitters. Most of them had been opened out of habit, if I shop somewhere I should have their loyalty card, right? Well, it most cases the answer is a resounding NO. I confess I was enticed by the promise of free stuff, that by the way, I end up never using. Now, I’m on a quest to remove and delete all those loyalty cards I no longer want to hear from. Simplify!

Here’s an other example; I have an Urban Outfitters loyalty card, I signed up online and made my purchase, points for me, yippie. A few months pass by and I shop again, this time in the store and forget to give the clerk my loyalty number, bummer, no points for you. This is exactly what happens to me most of the time, I just forget to use the loyalty card. These programs provide no value to me, only to the marketer that has my email, phone number and address.

More reasons to say goodbye to loyalty cards that get in the way of frugal shopping habits

Another reason to ditch the loyalty programs is how much money you need to spend to get any return. Most give back maybe 1%, spend $2000 and get a $20 certificate, that is unless of course, you use their retail credit card at 30% interest, then you don’t even get the 1%. It just doesn’t make sense anymore. I’m sure the marketers have done their research to find out what most people spend and then set the reward levels at just above that amount.

Three reasons I’m getting off the rewards merry-go-round and ditching my loyalty cards.

Signing up for retail cards in the hopes of future discounts and coupons can diminish the value of any rewards if you carry a balance, especially if the card has a high APR.
Spending the minimum amount to reach a reward threshold can be very expensive. Here’s an example:

Nordstrom customers earn $20 after accumulating 2000 points. Most shoppers get 1 point for $1. That is a 1% return. Spend $166.67 a month at Nordstrom and you get $20. Maybe I can save $50 shopping someplace else so that $20 reward loses it’s appeal very quickly.

I’m not picking on Nordstrom, I love Nordstrom but I will no longer play the rewards game. My personal Nordstrom saving trick is to purchase online using a discounted gift card and picking up in-store.

Why opt-out of loyalty programs

One of the biggest reasons I’m opting out is the major data mining going on with information.  I’m no longer willing to give away my information for a few dollars just so I can buy more stuff I don’t need. The whole purpose of these programs is to entice you to sign up so your information can be sold to marketing companies.  If you think you’re getting something for nothing or a real deal, think again.  Do the math on your own cards and see if I’m not correct.

Are Travel Loyalty Programs Worth Signing up for?

On the other side of the coin are the hotel and airfare rewards and to those, I say YES. I limit the brands I frequent as to not dilute my rewards. My go-to hotels are Starwood and Kimpton. Between these two hotel brands, I can usually find a hotel to fit my needs. Starwood has joined with Marriott and Kimpton has joined with IHG so my options have greatly expanded.  Luckily I always seem to get a perk during my stay, mostly either free Internet or a late check.

Airfare, I fly mostly JetBlue and America Airlines, both are good programs and I’m happy with what I receive in rewards from these programs.

Do Grocery store loyalty programs save money at the checkout?

What would frugal shopping be without those grocery store loyalty programs to give us the discounted price.

The bottom line is that you should do what works best for you and your spending style., however, make your decision on what works for you after you have run the numbers. If you’re a math geek then it’s a fun challenge.

Customer Loyalty Programs can waste your time

I find sorting and deleting the daily marketing emails Ithat fill my inbox is not worth the effort just to save a few dollars off of something I probably don’t need. Once I’ve completed my loyalty program deletion campaign I’ll probably switch my email and start anew with these golden rules.

  • Politely say no to any request for any personal information.
  • Don’t fall for the signup for an account to make it easier for you to check out next time” spiel. It’s not to make your life easier, it to make theirs more profitable.
  • Only buy what I can afford to pay cash for.

Frugal shopping habits can be supplemented if you use customer loyalty programs with care.

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