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.
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