Recently I saw a news segment that talked about the various types of reward programs out there that companies offer to credit card users as an incentive to buy things with their card. I guess everyone knows that you usually have to purchase a lot of things to accumulate enough points in order to claim some decent rewards usually. There was an example used with one rewards program where you would literally have to spend over $100,000 in order to get an $800 airline ticket. That kind of shows you why companies usually love providing customers these kinds of reward incentives. Now obviously for most reward programs I would think that it would be safe to assume that the company would like you to spend all of your points on an item that doesnâ€™t cost them that much as I guess you can say it is kind of like a mark up on the items they think people would be more inclined to buy. I decided to have some fun to see how true this may be.
Now one of the rewards programs that I have is the Air Miles reward program and so I signed in to its site to find out the type of rewards that I could get with my Air Miles points. While browsing through some of the electronics and games, I saw a Nintendo DS Lite and a Nintendo Gamecube. These were the perfect examples for a test I thought as I know the retail value of these products. Now the Nintendo DS Lite was 1700 points as seen here:
In Canada, a regular price for one of these DS Lite machines are around $149.99 at most retail outlets. Now the other product was the Nintendo Gamecube which was 1400 points:
Although this product is on its way out as the new Nintendo Wii system is already out, a Gamecube here is usually around $99 Canadian. Now for this rewards program, I earn about 1 point for every $40 that I spend with my credit card. That means to buy the DS Lite I would be using about $68,000 worth of purchases to get a $149.99 item and for the Gamecube I would have essentially spent $56,000 to get a $99 item. Kind of absurd when you think about it Iâ€™d say. This should be a big reason for you to want to get the best value in whatever reward you take.
Now in the rewards catalogue there was a section where you could redeem your points for gift cards. I noticed that they had these $50 HBC gift cards for 400 points:
There is actually a store here called Zellers where they actually do sell video game systems as well and that store actually happens to be a part of HBC (Hudsonâ€™s Bay Company) where you can spend those gift cards. With those gift cards, not including the tax I could technically buy the DS Lite for 1200 points or the Gamecube for 800 points. Quite a substantial difference. This just goes to show you that you have to shop around wisely as well even when it comes to using your credit card rewards points.