Reward points

Rewards points 101


An estimated 90% of Canadians collect rewards points from at least one loyalty program, and the average Canadian collects from over 7 programs.

While loyalty programs can be traced to the 1980’s Green Shield stamps, they’ve ballooned in the last 20 years. Rewards points can now be earned on everything from flights to groceries, meals to your morning coffee.

The perks can be great if well managed, but nearly half of loyalty card customers say that participating in these programs often affects the amount they spend. And one-third say they’re likely to buy more of an item to get more points.

So how do you get the most from your loyalty programs? A few things to consider:

1. Who’s watching your program?

For example: Aeroplan was created by Air Canada, so some may think that it’s regulated by the Canadian Transportation Agency (CTA). But guess what? Air Canada spun it off as a separate company which it no longer controls, so it’s not subject to CTA regulations.

2. My points expire?

In the last few years two major loyalty programs attempted to put expiry dates on earned points, but decided against it (class action lawsuits, consumer backlash, and drafted government legislation preventing expiry policies may have persuaded them). However, until proposed legislation becomes law, check your reward plans for expiry policies.

3. Inactivity is bad for your points

If you’re not using your points (accumulating or redeeming them), they may vanish from you account. Some programs will cancel your points if inactive for one year. Infrequent plan users may want to avoid programs with these conditions.

4. Keep up on program changes

Starbucks, for example, revamped their reward system from rewards on purchases made, to rewards based on dollars spent. Meaning you may need to be a lot more caffeinated before your next freebie.

5. Take the money and run!

In some cases, a cash back reward (often 1-4%) may be a better option. This is particularly true for infrequently used cards where the benefit of earned cash may outweigh accumulating points you may never use. Additionally, cash back may not have extra fees such as taxes, fuel surcharges, shipping and environmental fees, which some redemption’s carry.

6. Know the limitations

Some air travel points programs have blackout periods or limit reward flights during peak travel seasons. If you’re a student and your end of term trip home falls within those blackout dates, your plans may be grounded. Check to see which airlines are least restrictive.

7. Point inflation

Some programs increase the required number of points to redeem for a particular item. For example, a domestic flight that formerly cost 10,000 points may now cost 15,000. Know what your points are really worth.

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