Introduction to Loyalty Programs

Definition of a Loyalty Program

A loyalty program offers incentives or rewards for purchasing from an affiliated partner. These incentives can be in the form of cash back, points that can be redeemed for prizes or merchandise, or "miles" that can be used to purchase airline tickets.

Purpose of Loyalty Programs

These programs are designed to alter your behavior to purchase more of a product or service than you would in the absense of the loyalty program.

The program hopes to ingrain a pattern of behavior where you will prefer to shop at the stores affiliated with their program.

Many programs also track your purchasing behavior, so they can assess and sell this information back to the affiliates of their program.

Which Loyalty Programs Are For You?

This is a personal choice, but it probably makes sense to pick one multi-purpose program as your primary program so that you can reach the highest reward tier quicker then when spreading your activity across multiple programs.

Air Miles and Aeroplan are the two main multi-purpose programs. If you are looking for simplicity, then a good strategy would be to obtain a credit card affiliated with one of these and look for opportunities to shop at affiliated vendors.

If you're willing to put in a little more effort then you can often reap substantial benefits by also participating in some of the more specialized programs.

Conclusion

Loyalty programs can be as valuable a tool to the consumer as they are to the provider, if you take the time to understand the programs and the value they can provide to you.

Stay tuned to this site to learn how you can get free food, discounted gift cards, and more!