Tips for Saving Money Every Day: Are Loyalty Programs Worth Your Time?

• Author: Mary Singleton
• Posted: 2024-10-15

Businesses across the country claim that they offer fantastic loyalty programs designed to help their customers save the most money when purchasing products and services. A traveler can buy a plane ticket or book a hotel room and earn points off of a future trip or a free night's stay, respectively. They can earn points at the gas pump for free snacks or a discount off of future refueling. They can even earn cashback rewards.

Yet, these programs often trick consumers into spending money in ways that harm their finances. Businesses often link these programs to credit cards that drive people further into debt or require members to spend more money than they would normally to enjoy any savings. As a result, a lot people actually lose more money than they save.

If you're wondering whether any of these programs are worth your time, the short answer is "Yes." Some programs can actually help you save money and provide other perks. That said, you need to know how to recognize the programs that can potentially damage your finances. Follow these tips to help you make the most of available loyalty programs:

Sign Up for "Necessity" Programs

Food, clothing and transportation to commute to work or school are necessities. If a business where you typically spend money for necessary products or services offers a free loyalty program that provides members direct discounts, cash back or redeemable points, sign up for that program. As long as the program doesn't charge any fees, you need to use this type of loyalty card so that you're not wasting money every time you shop. With a grocery store loyalty card alone, you might save between 10 and 15 percent every trip, receive member-only coupons or discounts and possibly even receive free food or non-food product samples and free meals during holidays.

Check Out Bank Loyalty Programs

Financial institutions often offer their customers access to discounts, redeemable points and cash when they buy products and services from partner retailers and other merchants. Some banks also recognize loyalty program members by offering a buffer of up to $100 in the event of an overdraft or in anticipation of a paycheck deposit. This is the perfect opportunity for you to save money and potentially make extra money via transactions at businesses you already shop at regularly. Yet, many banks don't sign up their customers for these programs automatically. You must actively check with your bank, credit union or other financial institution. You must also typically switch your bank-issued card to one branded with the logo of the loyalty card program.

Pick Bundle and Partner Programs

Traditionally, many national brick-and-mortar retailers only ever offer their loyal members a few discounts throughout the year or location-specific perks. Recognizing that consumers want more from loyalty programs, a lot of retailers and marketplaces now offer bundled and partnership options. If you shop extensively online without a membership, you might learn that you can save on shipping and receive extra incentives with a paid loyalty program membership fee that's lower than the yearly shipping costs. Additionally, if you don't already have an AAA motor club or AARP aging empowerment membership, it's time to look into these unique loyalty programs since both organizations partner with hundreds of retailers nationally to offer discounts.

Use Financial Common Sense

Before you sign up for any free or paid loyalty program, it's important to compare the upfront and long-term costs against potential savings and extras. For example, a negative with some points-only programs is that businesses often reset earned points after 30, 60 or 90 days, which means you need to track points regularly and use them before they expire. Exclusive "members-only" deals might also cost you more than looking elsewhere for the same product or service. Members-only deals are designed by marketers to prompt consumers to buy things they often don't need on impulse. Always ask yourself if you really need the item and whether you can find it cheaper now or later somewhere else. Additionally, compare the cost of transportation to pick up or ship the item against the membership savings.

Stop Carrying Every Card

One of the biggest downsides with loyalty card programs is that you need to put time aside to manage all of the physical cards and associated account passwords. Although several loyalty card apps exist for electronic devices, these apps usually require that you pay an extra fee. You can bypass these fees and save time spent manually inputting or scanning card information by simply investing in a book-style binder designed for business cards. This method also provides you with a great way to control offline impulse shopping and prevent lost cards. Instead of carrying all of your loyalty cards in a wallet or purse or on a keychain, you can limit your spending and save time and money by only pulling from the binder the ones you think you need for any particular shopping trip.

Things to Keep in Mind

As you can see, loyalty program cards are definitely worth your time and, in some cases, the cost of membership fees. You merely need to recognize the many ways in which these programs attempt to convince you to tap into and waste your reserves of hard-earned money, and then take steps to protect yourself while taking advantage of savings.