Big department stores have long been embattled creatures: First they were hit by the demise of downtown areas (though many are now coming back); more lately, it's been the rise of electronic retailing and giant Internet stores like Amazon. But the behemoths aren't without their weapons. One key way they attract business: loyalty rewards programs, available to customers who use the store's own charge card, or its affiliated credit card (usually a customized Master Card or Visa).

Although each has its individual wrinkles, they basically work the same way: You earn dollars or points every time you buy stuff at the store, either the bricks and mortar variety or its website. After a certain period, the points are turned into cash (technically, a gift card) good for – what else? – buying more stuff. 

Who Offers What

The biggest bang-for-your-buck programs are run by the more mass-market (though hardly bargain-basement) retailers.

Macy’s offers the best rewards program by far, called Thanks for Sharing. You are enrolled once you spend $25 with your Macy's charge card. After that, you receive 10% rewards on eligible purchases made on your Macy's card. The enrollment period for this program runs until Dec.31, 2016.

Kohl’s gives it customers the second best offer: $5 for every 100 points or five cents per point. Then there's Belk, whose program offers $1 per point and $10 for every 400 points.

More posh stores have programs too; only these are a tad less generous. Saks Fifth Avenue offers a $25 gift card for every 2,500 points a customer earns; Neiman Marcus and Bergdorf Goodman (which are under the same management) offer $100 point cards for every 10,000 points; and Nordstrom offers a $20 "Nordstrom note" for every 2,000 points.

Two department stores offer less than one cent per point earned: Bloomingdale’s offers $25 for 5,000 points; Dillards, a $10 gift certificate or 10% off coupon for 1,500 points.  

Compounded Growth

The dollar-per-point comparison does not tell the full story. Many stores offer opportunities to earn points more quickly, depending upon the amount you spend each year. For example, Dillard's offer most loyalty members two points for every dollar charged to the store’s credit card, as do Neiman Marcus and Bergdorf Goodman. At the latter pair, clients who spend $75,000 and up per year become part of the "President’s Circle" and can earn five points per dollar charged. Bloomingdale’s offers customers three points per dollar. 

Not surprisingly, in many cases the more you spend, the more advantageous the program: You not only earn more points, you get a chance to earn them faster. For example, Saks offers two points per dollar spent, whether using its own credit card or its customized MasterCard, if you charge up to  $5,000 in one year. If you charge between $5,000 and $10,000 annually, you earn four points per dollar; over $10,000 it is six points per dollar. 

Special Days

To encourage sales at certain times, many stores offer bonus-points opportunities throughout the year, in which your expenditures earn even more than the usual number of points. Saks periodically designates double and triple points days. Bergdorf Goodman and Neiman Marcus offer cardholders who spend $1,000 and up a double-points day of their choosing (so you can opt to make it the day you splurge on that $7,000 Ralph Lauren embroidered gown and the velvet Christian Louboutin stilettos, plus the beaded Judith Leiber bag to go with).

Nordstrom also offers its loyalty members triple-point days: The number of triple point days you get per year is dependent upon one’s spending level. If your annual spending level is up $1,999, you get one day; annual spending between $2,000 and $4,999 gets two days, and so on. Customers can choose which days to designate for triples point. In addition to triple point days, Nordstrom offers its loyalty customers discounts on clothing alterations; annual spenders of $10,000 and more get totally free tailoring. 

The Bottom Line

Department store loyalty programs are not unlike the rewards programs offered by credit cards: The aim is, of course, to get you to shop with their particular piece of plastic. So you need to analyze whether using the department-store credit card offers you better, or even comparable benefits than using your favorite MasterCard, Visa, American Express or Discover (For more, see: How to Effectively Compare Credit Card Rewards).

Remember, the store points are only good at that store; the bonus money you earn comes in the form of a store gift card–whereas a regular cash-back credit card actually gives you the cash back (on your statement, at least: see Top Credit Cards with 2% Cash Back). Still, if you regularly shop at a particular retailer, why not allow it to reward your loyalty?




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