Reward and customer loyalty programs

From: Innovation, Science and Economic Development Canada

Companies offer reward and customer loyalty programs in various ways. Coffee shops may grant a free beverage to frequent buyers while credit card companies may give credit card cash back.

You can sign up for reward and customer loyalty programs where you shop or online. Typically, you can use a smartphone, or a card given at the time of purchase, to collect points. Then, you can exchange these points for a variety of items such as goods and services, cash back, discounts and coupons.

There may be differing terms and conditions depending on which reward program you've signed up for, where you live or the way you buy products and services.

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Credit card reward programs

Most credit cards have reward programs that issue general points, travel points, retail credits or cash back rewards.

General points may be redeemed for goods or services while travel points can be used toward flights, hotel stays, car rentals or vacation packages. Some credit card reward programs are linked to a specific chain of retailers that offer higher reward points when you shop at their stores. Cash back cards offer a percentage of cash back on eligible expenses.

When considering credit card reward programs, it's important to know about monthly or annual fees. Be aware that these credit cards often have higher interest rates and annual fees that may cancel out the value of the rewards points, depending on your spending habits. To take advantage of the greatest rewards from a credit card company's reward program, it's best to pay your balance in full each month. If you carry a balance, increased interest charges associated with a credit card may outweigh the benefits of a reward program.

For help comparing the features of different credit cards, including interest rates, annual fees and rewards, check out the Credit Card Comparison Tool.

Multi-retailer reward and customer loyalty programs

Some reward programs include cards that can be used at a group of affiliated retailers to collect points. You may either redeem these points as instant cash back on purchases or accumulate them in exchange for items like travel rewards or goods.

Points collected through multi-retailer programs may expire after a certain period. Take note of any expiry dates when signing up for this type of reward program, and gauge how often you plan to use the program.

Travel reward programs

Several airlines and travel companies offer travel rewards or frequent flyer points. You can accumulate these points when booking a flight, booking a hotel room or renting a car. Sometimes, you can accumulate through additional credit card purchases.

Be aware that some travel reward programs have "blackout" dates. That means during specific periods—often during holidays or peak season—you may not be able to redeem your travel rewards. Some types of travel rewards limit the number of seats available to those who travel using these programs. Make sure to check each reward program's terms of service agreement to learn about such limitations before signing up.

In-store rewards and store value coupons

Retailers often offer in-store reward programs. They may be as simple as giving you a free product or service after purchasing a certain value of goods or services at that particular store. Other in-store reward programs may come in card form that lets you accumulate points that you can trade in for free products, services, coupons or money-off vouchers. Keep in mind that these rewards and coupons typically have expiry dates.

Some in-store reward programs may not allow you to collect points on certain products such as prescription drugs, gift card purchases, postage, lottery tickets, public transportation tickets or passes, or tobacco products. These regulations vary by province and territory and by the type of program.

Online rewards, discounts and offers

Companies may offer discounts for purchasing products online instead of accumulating points in stores. They sometimes offer exclusive rewards to users who participate in online activities.

Some reward programs operate entirely online. Make sure to read the terms of service agreement to know how you can collect and redeem rewards.

Choosing a reward or customer loyalty program

With companies offering various types of reward or customer loyalty programs, it can be difficult to pick the one that's best for you.

Start by researching the programs online or by calling companies for information. Consider the following when comparing different reward programs:

Sharing your information and data with companies

You may be required to fill out personal information when signing up for a reward program. Read the terms of service agreement carefully to understand how each company is storing and using your data. Thanks to this information, many companies use your purchase history to fine-tune marketing campaigns.

If you suspect a company is misusing your personal information, you should contact them directly. Consider sharing a privacy concern or filing a formal complaint with the Office of the Privacy Commission Canada.

Redeeming reward points

Always make sure you check to see when your reward points expire so you can redeem them in time.

When it's time to redeem points, consider the value of the reward you wish to collect. Compare the value of the item to the number of points you're trading in. You may find that you can get better value from your points on different rewards.

Certain companies offer point swaps where you can sign up online to trade points with other users, or even buy more points to gain rewards.

Sometimes, you can donate your accumulated points to charity.

If your reward points expire, some companies will allow you to restore the points for a fee.

Refer to your reward program's terms of service agreement to find out if you can swap, buy, donate or restore points.

Managing reward and customer loyalty programs

There are a few tools available to help you manage your reward programs.

Mobile apps: Some smartphone and tablet apps allow you to scan all your loyalty cards to your smartphone so that they are easy to find. Others allow you to access deals and coupons from the businesses you frequent most often, along with storing your reward cards. They can often help you track your rewards, as well. However, some reward programs may not function with all third-party apps, so check before downloading. While most apps are free to use, some come at a cost. They are either provided by retailers directly or are offered by a third-party company.

Online accounts: Some companies offer the option to log in to an account online and track your rewards. Tracking points can help you see where you're spending your money and help you find ways to gain more points.

Sales receipts: Some companies print your rewards balance on your receipt after you've shopped in their store. Usually, they show the number of points accumulated to date, and how many points are needed before you qualify for redemption.

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