A reader sent me this article a few days ago from Lifehacker about the “cost” of rewards programs. I tout their usage quite a bit because I believe you are already paying for them as part of your purchase.
Participating in loyalty programs can also be fun, easy, and in effect, help trim your cost for buying things. It is very similar to when you take back your cans and bottles for recycling and get a refund. The key words there are “getting a refund.” Next time you buy a six-pack of something, look at how much you can get back by returning recyclables to the store, and then look at what the store (i.e. the State) is tacking on to your grocery bill to pay for it. Thus, if you don’t recycle your cans/bottles at the store, you are losing money.
Rewards programs are great, but should be worth your time
Back to the article, it provides a very handy chart that was developed by Mint.com that discusses approximately how much major rewards programs kick back to you when you use them, and their cost. A favorite among many, frequent flyer miles, are valued at about 1.2 cents, according to Smarter Travel. The Lifehacker article also cautions that some people will probably never earn enough points to make it worth their time given the hoops you may have to jump through, restrictions, and other conditions. However, by applying some principals they mention, you can become what they call “a rewards points ninja.”
My advice, participate when and where you can as long as the benefit outweighs the cost. Do your homework. One of the best rewards programs I have seen is CVS ExtraBucks, which I have discussed previously. It is definitely worth your time. I feel like every time I go to the store, there is a good chance of getting a dollar or two off of future spending just by using my card. This is how you should approach your usage of loyalty programs, too: feel like you are getting something out of it.