# Loyalty programs are a pain in the butt



## Longtimeago (Aug 8, 2018)

Nowadays, there is hardly a retail business that doesn't want you to join their 'Loyalty' program and reap the 'benefits'. Frankly, I'm sick and tired of it. Why can't they just decide a price they are willing to sell an item for and that's it. Everyone pays the same.

I recently saw a TV ad for a car in which they said that Costco members would get a discount when they bought a car. Really? Can you imagine the scene, you would into a dealership, pick a car and start talking price. The salesperson says, 'are you a Costco member, Costco members get a discount.' You reply, 'no I'm not a Costco member, so are you telling me that you will only sell a car to me at a higher price?' Folowed by, 'goodbye.'

Do Costco members really think they are going to get a better price than the next guy who isn't a member? Is anyone really that stupid? Or how about someone says, 'no, I'm not a Costco member, but I've got a Homesense card, will that get me the discount? Or if not, I can always go to your competitor next door and see if they will take my Homesense card.' How about a Common Sense card, does anyone take that?

Loyalty cards are really just treating us as if we were stupid. I'd like to see a government ban their use entirely.

Now please, don't post about how you love Costco or whatever and don't post about how you hate the government or whatever. Kindly post about your views on loyalty cards in general. Do you really think you are getting an advantage from them or do you think they are really fooling no one?


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## sags (May 15, 2010)

Costco pays the dealership a small amount for every car sold to a Costco car owner.

The Costco discount is stackable upon other discounts, which are also paid to the dealer.

It is doubtful that someone without those discounts will get a similar price reduction.

If a customer uses air miles to discount or pay for a flight, does a customer without air miles enjoy a similarly discounted or free flight ?


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## Beaver101 (Nov 14, 2011)

Longtimeago said:


> Loyalty cards are really just treating us as if we were stupid. I'd like to see a government ban their use entirely.


 ... ban by the government? Don't think so as there's a tax base potential there despite loyalty points or rewards supposedly have zero value. Also, don't see these loyalty programs going away anytime soon. We, Canadians, love them. Moreso than our payable plastics (aka ccs).


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## OnlyMyOpinion (Sep 1, 2013)

I agree with you LTA. 
Integral with all these programs is the personal data they gather to use or sell.
IMO, just lower the price for everyone a bit and get rid of all these rewards cards, air mile cards, etc.

Added: But I'll still save my McD coffee stickers (and Jargey's too if he leaves his cup long enough).


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## ian (Jun 18, 2016)

We like loyalty cards.....but mostly several the airline, hotel, credit card variety.

Just returned from our from a winter trip. Our one way flight from Calgary to Bangkok was done on Delta Skymiles. We had accumulated points for years and were able exchange them for a flight. Our 5 day stay at the Sheraton in Sydney, Australia was paid for using our Marriott points. The cost would have been approx $1200 had we not had the points. One segment of our flight home, Hawaii to Calgary, was courtesy of United's Mileage Plus club points. Our air fares from Thailand-Gold Coast, Australia and Sydney-Honolulu were paid for with our Aspire Travel Mastercard points.

We had two cheques totalling $280 back from Costco and from Capital One Mastercard when we arrived home in late March. Just for shopping where we normally would. Same as last year.

I buy gas at Calgary Co-0p. They serve (very nice in the winter) and they clean your windscreen. And they give us an annual rebate of 6-8 cents a litre every year and a rebate on liquer purchase at their store.

Having said that, we will not pay over the odds for any services or products simply because we have 'the card'. We do not bother with most of the retail cards because we cannot be bothered saving them for 15 years in order to get a pencil sharpener or a discontinued digital device of some sort.


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## Longtimeago (Aug 8, 2018)

sags said:


> Costco pays the dealership a small amount for every car sold to a Costco car owner.
> 
> The Costco discount is stackable upon other discounts, which are also paid to the dealer.
> 
> ...


Well you can just keep telling yourself those kinds of things sags and meanwhile I will negotiate a better price than you got with your Costco discount. Airlines will also negotiate by the way, although most people don't realize that either.

Loyalty points are not 'free', you pay for them every time you make a purchase. Do you really think the amount Costco will pay to the dealer comes off Costco's bottom line profit or does it come off their 'gross sales' number that is simply another term for 'from your pocket'.

I spent all my working years in Sales sags and I don't think anyone is likely to understand who is paying for something more than I do. The customer pays for everything, one way or another. Price minus cost equals profit, that's as simple as it gets. Your Costco 'car discount' is in the cost part of that equation and is also in the PRICE part of the equation, the price you pay for every purchase you make. A supermarket's points program is no different, a credit card with a 'cash back' reward or air miles is no different. YOU are always the one paying, don't kid yourself.


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## Userkare (Nov 17, 2014)

Our Costco membership reward cheque pays for the membership fee plus a little extra. Tangerine Mastercard rewards netted us about $500 just in 2018, tax free. Every few months our President Choice points gets us $100 free groceries.

I'm going to need to eat, so why not accept the discounts? If they monitor what I buy so that they can target special offers to me, so what? I'm not going to buy anything that I would not have otherwise bought no matter what the reward discount.

I see it as the modern electronic version of cutting out coupons from magazines.


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## OptsyEagle (Nov 29, 2009)

sags said:


> Costco pays the dealership a small amount for every car sold to a Costco car owner.
> 
> The Costco discount is stackable upon other discounts, which are also paid to the dealer.
> 
> ...


Yeah, I doubt Costco pays the dealership anything. The dealership is saying to Costco; if you want to send us over some more idiots, who actually are in the market to buy a car, thinking they will get a discount, that would be great. We deal with idiots like that, thinking they are going to get a good deal, all day long. A few more would be nice. Thank you.

I wish this was not the case, but in the auto industry it unfortuneately is.


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## Longtimeago (Aug 8, 2018)

ian said:


> We like loyalty cards.....but mostly several the airline, hotel, credit card variety.
> 
> Just returned from our from a winter trip. Our one way flight from Calgary to Bangkok was done on Delta Skymiles. We had accumulated points for years and were able exchange them for a flight. Our 5 day stay at the Sheraton in Sydney, Australia was paid for using our Marriott points. The cost would have been approx $1200 had we not had the points. One segment of our flight home, Hawaii to Calgary, was courtesy of United's Mileage Plus club points. Our air fares from Thailand-Gold Coast, Australia and Sydney-Honolulu were paid for with our Aspire Travel Mastercard points.
> 
> ...


Unfortunately ian, the existence of loyalty programs does mean that everyone pays for them whether they use them or not. I dislike them a lot but nevertheless we do use some of them simply because to not do so will penalize us in having to subsidize others. I can't very well go to the supermarket and 'negotiate' the total price of our groceries purchase each time. It simply isn't practical. But that doesn't make loyalty programs a good thing in any way.

You are saying you 'like them' but do you really or do you just 'use them' because to not do so would penalize you on a practical level. Liking and using are not synonymous and do not refer to the same question. I use them, but I don't like them. If they all went away, I would in fact be happier. I would not have to negotiate the price for a flight or a hotel, their prices would be lower to begin with since they would not include a portion to cover loyalty programs. It's a cart/horse, chicken/egg type of thing.

Regarding airlines and hotels, I negotiate those every time. Unlike a basket of groceries, the amounts are large enough to make negotiating practical. You mention for example a $1200 Marriott stay but you do not mention how many dollars you have to spend to get that $1200 'free' stay. One of the big reasons loyalty programs are so popular I believe is because people do not realize just how little they are actually being REFUNDED from the money they spend. And that is all a loyalty program really is, a REFUND of your own money.


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## cainvest (May 1, 2013)

Longtimeago said:


> I recently saw a TV ad for a car in which they said that Costco members would get a discount when they bought a car. Really?


Only one way to find out ... only bring up the Costco membership discount with the finance person *after* you've found the best deal. If they simply tack on the discount it's a win otherwise it's just a scam.



Longtimeago said:


> Loyalty cards are really just treating us as if we were stupid. I'd like to see a government ban their use entirely.


I'm not a fan as well but it's smart to use them as you're paying for others to get "free" stuff, it's built into the price already.


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## ian (Jun 18, 2016)

You are correct. To a large extent others are paying for our rebates.

We have over $1000 in our Co-Op share account exclusive of the rebates we get every year. The cost? I think we paid $5 to become a member. Simply by buying gas at the same price that all the other stations charge. But with added benefits of service PLUS they hire seniors, students, and disadvantaged individuals for the pumps-people who otherwise might not get employment. That share value build up is essentially from 18 years of gas purchases for two vehicles plus a small amount of liquer/grocery purchases.

Do we pay for Marriott? Well we did. We signed up for SPG Amex. Paid $125. for 25000 points. They got rolled into Marriott as 75000 points. 80,000 points got us 4 nights plus one free in Sydney. This card costs $125 BUT we get one free night stay at a Marriott every year. We do use this. Our savings run from $175 to $275, less the card cost. We ONLY stay at at Marriott brand hotel if the price is competitive. Same will all other points programs. 

We certainly will not fly Delta or United if we can get a less expensive fare. Quite often we do, but sometimes on partner airlines where we get the same points credit and a lower fare. We pay, I think, $125 a year for our Aspire Mastercard. Last year we got a $1300 refund on a cancelled trip through their insurance program. We also got just under $700 worth of travel credits. I recognize that all vendors are paying a higher fee because of these cards. This only impacts us when we travel to jurisdictions where vendors charge an extra 3-5 percent for credit cards. In which case we often pay cash.

Some people take advantage of programs that yield benefits to them. Others do not. Some people take advantage of retail sales or travel discounts. Others do not. Who pays for those retail sales, travel discounts, etc. Obviously all consumers do. But that is not a reason for not taking advantage of a program that has obvious financial benefits for an individual.


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## MrMatt (Dec 21, 2011)

Longtimeago said:


> Nowadays, there is hardly a retail business that doesn't want you to join their 'Loyalty' program and reap the 'benefits'. Frankly, I'm sick and tired of it. Why can't they just decide a price they are willing to sell an item for and that's it. Everyone pays the same.
> 
> I recently saw a TV ad for a car in which they said that Costco members would get a discount when they bought a car. Really? Can you imagine the scene, you would into a dealership, pick a car and start talking price. The salesperson says, 'are you a Costco member, Costco members get a discount.' You reply, 'no I'm not a Costco member, so are you telling me that you will only sell a car to me at a higher price?' Folowed by, 'goodbye.'
> 
> ...


Most loyalty cards aren't worth the trouble. I have PC & Petropoints, and a cashback mastercard.

Am I getting an advantage? Absolutely.
Petro Canada is on my way to/from work, and they have the same/lower price. It isn't like I drive across town to save $0.05 at Costco.


For most of them I think it's just a way to get valid email addresses to send advertising to. 

I don't see what public good a loyalty card ban would be. If you don't like them, don't use them. What is a reason for a government intervention here?


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## Mechanic (Oct 29, 2013)

I have seen at Petro Canada gas stations where they give 3c/litre off if you use a certain card, which irritates me but I stopped buying fuel there anyway seeing as how they are one of the culprits in gas price fixing. I'll save that for another thread. I use my Costco Capital One card for most of my purchases and just recently got a rebate for $200 and another over $700 so that seems worthwhile. If they want to give a discount on a vehicle, I would take it but only if I actually wanted that vehicle. They have had a Ford discount for years but I won't buy another Ford so not an issue.


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## ian (Jun 18, 2016)

I was very surprised to see a Chev product in Costco the other day. Usually it is Ford. I would not consider either for a new vehicle purchase.


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## Eder (Feb 16, 2011)

Longtimeago said:


> Loyalty points are not 'free', you pay for them every time you make a purchase. Do you really think the amount Costco will pay to the dealer comes off Costco's bottom line profit or does it come off their 'gross sales' number that is simply another term for 'from your pocket'.
> 
> I spent all my working years in Sales sags and I don't think anyone is likely to understand who is paying for something more than I do. The customer pays for everything, one way or another. Price minus cost equals profit, that's as simple as it gets. Your Costco 'car discount' is in the cost part of that equation and is also in the PRICE part of the equation, the price you pay for every purchase you make. A supermarket's points program is no different, a credit card with a 'cash back' reward or air miles is no different. YOU are always the one paying, don't kid yourself.


Only the people that don't use the credit card or loyalty card pay extra. When ever I'm at a supermarket I ask for a complimentary swipe to get the deals a loyalty card provides...no biggi, although I was at a Save on Food in Westbank once that refused to give me a swipe so I left the groceries on her till and went to SuperStore.

Now iwhat really gets my goat is the required loonie to get a shopping cart. I never carry change,I give it to the bums etc.


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## Prairie Guy (Oct 30, 2018)

I hate loyalty cards too but I play the game because it pays. In a year I average $500 back from the Costco Mastercard alone plus another $80 - 100 from Costco, $100 from Co-op loyalty card, plus a little bit from couple grocery store cards.


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## sags (May 15, 2010)

Eder said:


> Only the people that don't use the credit card or loyalty card pay extra. When ever I'm at a supermarket I ask for a complimentary swipe to get the deals a loyalty card provides...no biggi, although I was at a Save on Food in Westbank once that refused to give me a swipe so I left the groceries on her till and went to SuperStore.
> 
> Now iwhat really gets my goat is the required loonie to get a shopping cart. I never carry change,I give it to the bums etc.


My wife got a key from Food Basics that replaces the loonie for shopping carts. Ask the store customer service.


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## sags (May 15, 2010)

Automaker funded discounts don't cost the dealership anything. The automakers roll out incentives and discounts every month or 6 weeks to sell inventory attract new customers.

If the dealership negotiates a discount with a customer it comes out of their profit and their profit margins are very thin.

Dealerships make more money servicing cars than selling them.


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## Rusty O'Toole (Feb 1, 2012)

I've tried a few so called loyalty programs and found the loyalty only goes one way. Plus they require about $100 of effort on my part for every 50 cents in savings. The one exception is my Canadian Tire Mastercard which gets me Canadian Tire 'money' automatically. I use it on things I would be buying anyway and get $25 to $50 a month out of it.


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## Eclectic12 (Oct 20, 2010)

cainvest said:


> Only one way to find out ... only bring up the Costco membership discount with the finance person *after* you've found the best deal. If they simply tack on the discount it's a win otherwise it's just a scam ...


As the price was negotiated, the fees for what I wasn't interested in were removed. At each balk I reminded them that my current car worked fine so I would be happy to walk.

When all was done, I remembered the Costco discount which was taken off of the negotiated price.


Cheers


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## kelaa (Apr 5, 2016)

At least the old Canadian Tire paper money program is over. It was infuriating that we as consumers were paying them to administer a dumb program to return a small rebate in an inconvenient form back to us.


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## ian (Jun 18, 2016)

We do not bother with most of the usual retail ones. Never shop at CT.

We do fire some of them. We punted Aeroplan and our Aeroplan premium credit card. Their admin fees for points flights were terrible. So we moved to the United program and replaced the card with a 2 point rebate travel card.

If the programs look to be a pain, or become a pain we simply avoid signing up or we punt them.


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