HomeFinanceAre reward schemes and loyalty programs worth it?

Are reward schemes and loyalty programs worth it?

In a competitive consumer environment it’s hard to escape loyalty programs. Businesses and brands, hungry for customers, offer a wide range of promises to get you to spend with them. But are they actually worth it? 

We’ve recently seen CommBank launch Yello, a customer recognition program that offers eligible CommBank customers a range of benefits from cashbacks and discounts to prize draws. CommBank says it modelled the program on Buy Now Pay Later providers like Afterpay, which boast a number of retail partners and offer users a range of discounts and exclusives.

The first thing to know about these partnerships is that they’re beneficial to both providers. CommBank offers you a discount on a Disney+ subscription, in return driving your business to Disney+. So while these might look like great deals, and might actually be great deals, it’s good to remember the businesses still benefit.

That’s not to say that all rewards schemes, loyalty programs or points systems aren’t worth it. A good rule of thumb is to look at your habits. If a business is offering a discount on products you regularly purchase, or a sign-up bonus for a service you’ve already been considering, it’s worth looking into. But if you would have to significantly change your habits, it’s less beneficial. 

Offerings like Yello are a nice added bonus for existing customers, but for those looking to change banks, a customer recognition program shouldn’t hold any more weight than any other consideration. You should still do your research and ensure you’re not blinded to more important elements like fees and conditions. 

Are points and frequent flyer programs worth it?

Airline points programs are probably the most well known customer loyalty programs. Points are accumulated through the money you spend and exchanged for upgrades, flights, access to airport lounges, and even to purchase items in online stores.

There are entire blogs to teach you how to make the most of each frequent flyer program, but there are a couple of things to consider. Look at how easy it is to earn points and whether they can be tied to places where you already spend money, like your grocery shop. There’s more of a movement now towards status levels alongside points gathering, so look at what’s involved in reaching those too and if it’s feasible for you.

Then, look at the redemption process. You often need thousands and thousands of points to redeem a free flight, but you can also use points for upgrades and lounge access. 

Unless you’re an incredibly frequent flyer, building points through travel alone is unlikely to get you very far, which is why some people connect them to other programs. 

Is it worth getting a credit card for the points?

Serious points gatherers usually start with credit cards. You’ll often see offers of thousands of airline points as a bonus for new sign-ups, alongside whatever points they currently offer on your spending. 

On the face of it, this might seem like a great deal, but it’s important to look deeper. Most credit cards have minimal spend and repayment amounts to stop you getting hit with excessive fees, plus the up-front points offers drop off after a certain amount of time or spend. 

If you regularly spend the minimum amount on expenses and are in a position where you can easily pay your credit card bill each month, signing up might be a way to get some added benefit from your regular spending. 

But experts warn against signing up for a credit card just for the points. Your credit score allows banks and financial institutions to access certain features of your financial history, including whether you regularly apply for new credit cards or are often late with your repayments. 

This score can impact your borrowing capacity in many scenarios, so it’s something to be mindful of. You’ll also need to consider whether the points you earn will outweigh any fees. 

Credit card companies offer other benefits too, including discounts, cashback and gift vouchers. Again, if you’re someone with regular spending habits and disciplined finances, a credit card can open up some added benefits for you. Just make sure you do your research first so you get all the benefits and no nasty surprises. 

Are loyalty programs good value for money?

Loyalty programs are a much simpler customer retention strategy. From supermarkets to cinemas, coffee shops to clothing boutiques, there is a never-ending number of loyalty programs you can sign up to without any risk. They operate on a very simple system whereby you’re rewarded for spending money with the business. 

Coles and Woolworths specifically offer you a certain number of points for every dollar you spend. These points can be redeemed for vouchers or discounts, and the programs connect across to the other businesses in the groups (think petrol, liquor and other retail). Both supermarkets also offer targeted sales and in-store deals for rewards customers. 

In these programs where your purchases are registered – think about any time you have to scan a card or give personal details – the retailer is tracking your data to create shopper profiles. This allows them to be more targeted in marketing and adds another level to the value a company gets from a loyalty program. 

Despite the fact these programs operate differently to a customer recognition program like Yello, the takeaway is much the same. A loyalty program isn’t going to be of use or value for you if you have to significantly change your behaviour to take advantage of it. If you’re a brand loyal shopper, signing up to a loyalty program may benefit you, but if you have to go out of your way to get the most out of a loyalty program it’s probably not worth it. 

At the end of the day, the allure of a loyalty program or reward system shouldn’t outweigh due diligence, particularly if it can have long-term consequences. The simpler they are, the less risk, but for more complex programs, make sure you do your research first and don’t let a flashy rewards program blind you to high fees or unfavourable contract conditions.

Are you signed up to any loyalty or rewards programs? Have you found any of them beneficial? Let us know in the comments section below.


  1. I don’t fly so am not interested in frequent flyer points.
    I have Coles Flybuys card and this provides me with $250 minimum of gift cards for the grandkids for Christmas each year.
    The CBA Credit card also provides us with gifts.
    There are numerous other cards that provide $5 off $10 off etc and being a figures person I utilise all these benefits to their maximum.

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