Is that reward card in your wallet worth it

Posted by Andrew Penny in Personal Finance on 23 October 2013 - Andrew is responsible for Quality Assurance at checkmyfile

Open your wallet or purse and you will no doubt see several reward or loyalty cards staring back at you, but are these rewards cards worth the effort?

In these days of austerity, consumers are more likely to shop where they think they are getting a bargain, value for money or some cash back and many companies are exploiting this by offering reward schemes and offers.

For example, filing up your car with fuel will often take a large sum of your weekly budget and both Shell and Morrisons offer reward cards to get money off once you collect enough points. But when you stop and think about how much fuel you would need to purchase in order to obtain the £5 or £10 off that next purchase the figures are quite shocking.

Shell offers 1 point per litre of fuel and you can redeem 500 points for £2.50. In short, at today’s petrol prices you would have to spend a staggering £688 to get back £2.50, giving you back a return of just 0.36%.

Morrisons give you 10 points per litre of fuel purchased but you have to collect 5000 points before they reward you with a £5 shopping voucher. Again you would have to spend £688, but at least you get £5 reward instead of Shell’s £2.50. This works out as a reward of 0.72% on the money spent.

Another factor with reward cards is the time it takes to get the reward. An average car filling up at 50 litres a fortnight would take around 6 months to claim these rewards.

And it is not just petrol stations that offer reward schemes. Nectar points offer a great number of deals but it is worth checking to see if you are getting a good deal. For example, in most participating places you can get 2 Nectar points per £1 spent.

To join English Heritage using Nectar points is 7750 points (which to earn would need you to spend around £3875), whereas on the English Heritage website it costs £48 for cash. Not such a good deal.

If you spent £50 a week at Sainsbury’s to get the Nectar points it would take you over 77 weeks to collect enough points to be able to get the English Heritage membership deal.

You would be better off putting £1 in a pot each week, and then you could afford it in only 48 weeks. Although, on the flip side of its deals, Nectar does offer a Sainsbury’s deal which is rewarded with £2.50 off your shopping for around £250 spent – a reward of 1%, which is better than the Morrisons deal.

What you can do to maximise your rewards and effort is to check online first to see if you are getting the best deals before you spend your hard earned points.

But since you will probably fill up at a Shell or shop at Sainsbury’s at some point, and it is not that much effort to hand over another card, as well as your payment method to get the points as an added little freebie.

It’s easy to collect the points and spend when you have enough, but is it really worth the effort to go out of your way for these rewards? Probably not.

Andrew Penny leads our Software Quality Assurance. He has a degree in Computer Science from the University of Lancaster

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