There is no shortage of retail stores that are offering customer loyalty programs that claim to save consumers significant amounts of money on future purchases. Do customer loyalty programs really save consumers money? The answer to that question depends on the retailer, and often, the amount of effort the consumer is willing to put in for the sake of saving money on future purchases. Here is a look at whether or not customer loyalty programs are really worth the effort, and how much money one can expect to save by participating.

SEE: Maximize Your Rewards With A Few Credit Cards

How Are You Rewarded?
Customer loyalty programs reward consumers in a number of different ways. From accumulating points to earning dollars off future purchases, loyalty programs are put in place to increase customer loyalty to a specific store and encourage shoppers to shop more often.

How Often Are You Rewarded?
How often you are rewarded by a customer loyalty program varies depending on the store's policy and how much effort you put into the program. Most loyalty programs provide rewards that are "earned." Essentially your purchases will earn you points or discounts towards future purchases. If you frequent the store, you may be able to cash out rewards fairly quickly. However, if you only shop at this particular store every one in a while, it may not be worth signing up for a customer loyalty program.

Not All Customer Loyalty Programs Are Created Equal
While many retailers and restaurants offer customer loyalty programs, each one is as unique as the store that offers it. To truly understand what you are signing up for, it is advisable to read the fine print of the loyalty program contract. This document will explain how you are rewarded, how often you can cash out and whether there are program limitations. Prior to signing up, make sure you know what the program entails.

How Much Do You Really Save?

The amount of money you save depends on the store, and how frequently you shop at the store. One example of a popular customer reward program is CVS's Extra Care Rewards Program. This program offers a variety of savings and rewards including 2% rewards on general purchases, $1 back for every prescription you fill with CVS, coupons towards future products and more. Depending on how frequently you shop at the store, you can earn money back to use on future purchases. The question of how much depends on your shopping habits.

Is It Worth the Effort?
Whether or not a customer loyalty program is worth the effort is up for debate. If you sign up for a customer loyalty program at a store you shop at frequently, it is likely to be worth your while. However, if you sign up for a customer loyalty at a store you rarely frequent, it is more likely than not to be a waste of time and effort. Additionally, it's not advised that you sign up for a program where you have to spend more to save more. Sign up for a program that allows you to save money on your everyday essential items.

SEE: Reasons To Steer Clear Of Rewards Cards

The Bottom Line
Customer loyalty programs can save consumers a considerable amount of money if they are willing to put in the extra effort. It is beneficial for consumers to enroll in a customer loyalty program at stores they frequent, such as their local grocery stores. Keep in mind that many stores try to lure you into spending more money by promising high levels of consumer rewards. Don't fall prey. Enroll in customer loyalty programs at stores where you are likely to spend money on things you actually need. The only time loyalty programs will truly benefit your bottom line is if you are getting discounts on items you already buy, as opposed to frivolous items you may not have purchased otherwise.
Photo Courtesy of Ron Cogswell

Related Articles
  1. Credit & Loans

    Walmart MoneyCard Vs. Walmart Credit Card

    Discover how the Walmart MoneyCard and the Walmart credit card have different benefits that may influence your decision on which one to choose.
  2. Savings

    These 10 Habits Will Help You Reach Financial Freedom

    Learn 10 key habits for achieving financial freedom, including smart budgeting, staying abreast of new tax deductions and the importance of proper maintenance.
  3. Credit & Loans

    Have Bad Credit? 6 Ways to a Personal Loan Anyway

    It'll cost you more, but borrowing is definitely doable. Here's how to proceed.
  4. Credit & Loans

    How To Minimize Holiday Debt Before It Happens

    Holiday expenses can drown you in debt. Find out how to avoid this festive spending hangover.
  5. Financial Advisors

    How Educating a Prospect Can Win You a New Client

    Financial advisors have many tools at their disposal to turn propects into clients. Educating them, rather than selling to them, is the first step.
  6. Credit & Loans

    These Are The Best Credit Cards For Making Balance Transfers

    Handled correctly – and very carefully – a promotional credit card balance transfer offer can save you money. Here are some of the best deals around now.
  7. Investing

    How to Raise Your Credit Score Quickly

    Here are the best tips for raising your credit score quickly.
  8. Credit & Loans

    Getting Your Name Off A Cosigned Loan

    If you want to remove your name from someone else’s loan, there are four key ways to do it.
  9. Credit & Loans

    How Credit Card Delinquency Works

    When you pay less than the minimum monthly payment on your credit cards, you become delinquent.
  10. Professionals

    Top Spots in L.A. to Woo Clients

    L.A.'s dining scene is full of celebrities, but these impress-your-client spots offer better a mix of exquisite fare and power-lunchers.
  1. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reducing the number of times shoppers and buyers have to pay for ... Read Full Answer >>
  2. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  3. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>
  4. Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with ... Read Full Answer >>
  5. How do NetSpend cards work?

    NetSpend prepaid MasterCard and Visa cards are popular prepaid debit cards requiring no minimum balance and no credit check. ... Read Full Answer >>
  6. Can the Best Buy credit card be used anywhere?

    The Best Buy credit card can only be used in Best Buy stores and when making purchases online through the Best Buy website. ... Read Full Answer >>

You May Also Like

Trading Center