Should you get a shopping reward card?

Posted at 05/17/14 1:20 PM

MANILA, Philippines – The biggest shopping centers in the country are offering reward and loyalty cards to shoppers, but are the perks actually worth it?

ANC’s financial adviser Salve Duplito analyzed the loyalty reward programs of SM, Robinsons, Ayala and Rustan’s and discovered that shoppers will have to spend millions just to earn thousands of pesos in reward points.

On “On The Money,” Duplito said that to earn P1 from SM Department Store and Robinsons Department Store, a shopper has to spend P400 in the grocery and P200 in the department store.

For SM, P1 in reward points can also be earned by spending P250 in Shell gas stations.

This means that to earn P10,000 that shoppers can only use to shop in their stores, the customer will need to spend P2.5 million in Shell stations, P2 million in SM and Robinsons department stores or P4 million in SM and Robinsons supermarkets.

To recover the P150 membership fee, customers need to spend P37,000 in Shell, P30,000 in department stores and P60,000 in supermarkets.

Owner of the Rustan’s frequent shopper card, on the other hand, will need to spend P200 to earn P1.

To recover the membership fee of P350, they need to spend P70,000.

Duplito said from the four, the Ayala discount card gives back the most reward because shoppers only need to spend P100 for a P1 reward point.

She added that to get more than just the basic perks and benefits, shoppers should learn to “work the system.”

She said shopping perks are only available to those who follow these rules:

1) Never rollover any debt on your credit card. Pay your total balance in full every due date
2) Spend only on what you need. Buying items you don’t need just to chase rewards is silly, but people fall for it all the time
3) Think about accessibility and transportation cost. Gas is expensive. So is car maintenance. Time even more priceless.
4) Don’t forget to track expiring points. All these loyalty rewards companies do not have a system to notify you when your points are expiring

“If you want to turbo charge your finances, use your rewards wisely. Don’t use them to buy frivolous stuff, use them to buy your usual groceries then deposit an equivalent amount in your emergency fund if you’re still building that up or in your investment account. This way, you can even make it grow over time through the power of compounding,” said Duplito.