According to a study by Colloquy, the average American household has 29 different memberships and loyalty reward programs. However, active participation in these programs has fallen by 4.5% since 2013. In other words, the typical family only uses 12 of these memberships.
This is partially due to the fact that companies aren’t creating the best rewards in exchange for being a loyal customer. Here are three store loyalty programs that aren’t worth it, and how you can tell which the difference.
When you sign up to the Sephora’s Beauty Insider program you’ll accumulate 1 point for every $1 you spend online and in their stores. While this seems like a good deal, you can only redeem these points for sample-sized beauty products from a select list, at a cost of 100 points. In other words, it costs $100 to receive a small sample that other beauty store usually give away free with each purchase.
What’s more, is that as a Sephora Beauty Insider you can choose to redeem 500 points (costing you $500 to accumulate) for one full-sized product from their limited selection. Sounds like a bad deal. One good thing though, is that you can receive an additional freebie on your birthday, but I expect it will only be another small sample.
According to the Papa John’s website, when sign up to become a Papa Rewards member you’ll earn 1 point for every $5 of pizza you order online. Once you’ve earned 25 points you’ll get a free large pizza with up to three toppings. But this is quite an expensive deal. Why?
If you’re doing the math, a “free” pizza from Papa Rewards will cost you over $125 (25 points x $5 per point = $125). Another thing that makes this rewards program terrible is that you’ll only earn points on purchases you make online, not in-store. If you order in person or over the phone, you’ll earn 0 points.
In an effort to replace their old cardboard stamp card, the new Subway card program allows to use a branded card and earn 1 point for every $1 spent on Subway menu items. In order to redeem your points for a footlong sandwich, or salad, you must cash in 75 points essentially paying $75 for lunch. Or you can redeem 20 ($20) points for a fountain drink or 25 ($25) points for a bag of apples slices.
Unless you’re a frequent customer, this rewards program is definitely not worth it. You do, however, get a special treat on your birthday.
Obviously not all loyalty reward programs are bad deals. Some are actually very beneficial. You just have to know how to distinguish the good ones from the not-so-great ones.
Here are three tips to keep in mind before signing up to any rewards program:
Check the earnings rate - Find out how much you have to spend in accordance with the number of points or rewards you’ll earn. Ideally you want to earn at least 1 point for every $1 you spend, with the option of being able to boost your points through certain events or special discounts.
Review redemption details - This is probably the most important detail to check when participating in any kind of store loyalty or reward program. It’s great if you earn points quickly but what really matters is how you can redeem them and what kinds of products are offered.
Pay attention to red flags - Always ask if there are any redemption fees or annual membership charges before signing up to any reward program. Read over the fine print to see what kind of restrictions there are, as well as what kinds of goods are offered for redemption. Keep an eye out for these red flags.
The bottom line with store loyalty rewards programs is to review the terms and conditions before you come under the impression that you’re getting great rewards. In some cases it may still pay off to participate in the rewards program if you’re a very frequent customer, but you may get better deals from other stores, so don’t be afraid to compare.