It seems nearly every type of business these days uses some form of points system to “reward” repeat shoppers as a promotional tool, from gas stations to nail salons. On the surface the deal is simple. Customers have a chance to opt in and earn points on their account with every purchase. They can usually redeem points the next time they shop – or use them at some point in the future for freebies or perks.
It can be very tempting to sign on to a points program with the hopes of getting that free smoothie on your tenth purchase. But are points programs a wise financial decision? That depends.
How Do Reward Point Systems Work?
You know the drill. In person, you’ll receive a card with your first purchase of something, and it gets stamped or hole-punched every time you return for the same product or service. If you’re paying in person, you need to have the card on you so you can get it stamped every time you buy the product in question. After a certain number of purchases, you get a reward – usually the same thing free of charge.
It works the same way online only you don’t need to keep track of your purchases. The business will happily do that for you. This benefits businesses because they’re a way to keep track of specific types of sales as well as to lure you back, whether online or in a store.
Reward Systems May Benefit the Business More Than You
Nothing in life is truly free, as the saying goes. Even when you get that free drink or discounted gas, you’re often giving something up, as well. That’s not always a bad thing – just be sure you know what it is you may be forfeiting. You see, reward systems are intended as an incentivization strategy to increase spending through earning in-store points or credits.
Sure, you might get an occasional free or discounted product or service. And who doesn’t love that? In return, you’re giving your loyalty (hence the name “loyalty program”) in the form of hard-earned cash. And possibly your personal information, especially with online purchases. Many shoppers are just fine with that. The bigger question to ask yourself is: How much are you spending? Did you really need that tenth lunch purchase just to get the free potato chips? What would you have spent your money on instead if you hadn’t signed on to the program?
Some loyalty programs are legitimately attractive to frequent shoppers. Fly a lot for work? Great! You’re sure to get a free flight eventually with that miles program. If you’re going to be a regular at a shop no matter what, then a rewards program may not be a bad way to accumulate a few extra dollars in your pocket. Just keep in mind that if marketing departments are creating rewards programs, they’re doing so to benefit the company’s bottom line – not yours.
Head to Chicago’s South Suburban Currency Exchange (SSCE)
Many people these days sign on to so many rewards programs that they don’t earn enough to even get the reward they were promised. After all, many purchases are things we want more than need.
What most people do need, however, are convenient financial and auto-related services. At Chicago’s South Suburban Community Exchanges (SSCEs), not only do you access a range of necessary services – from check cashing, to plate registration, to bill payment – but you can do so under one roof. Plus, with our flexible hours and multiple south suburban locations, a trip to your local SSCE is often more convenient and faster than driving to a big financial institution or waiting in line at the DMV.
And if you’re trying not to overspend, you may be better off ditching that credit card (and its rewards program) in favor of a prepaid debit card, which SSCE can make happen for you. You’ll always know what you’ve spent and you won’t be encouraged to use money you don’t have with the promise of something free later on.
SSCE helps south suburban residents achieve their financial dreams with a broad array of services. Find your nearest location or check out our other services online to find out what we can do for you.