Sharing Daily Discoveries About Personal Finance And Business Topics

Treating Reward Programs As Simply A Bonus

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There are a lot of companies that offer reward points as an incentive to get people to do business with them. What amazes me is how many people go out of their way to buy items in a reward shop by justifying thousands of dollars in extra purchases to get a reward that ultimately would have been cheaper to buy directly through a regular store outlet. In this post I will attempt to show how treating these reward programs as simply an added bonus just makes more sense.

Most people have some kind of reward incentive for using things like a personal or store credit card. Essentially, for every X amount of dollars you spend you can earn bonus points that can be redeemed for a product. What amazes me is how some people intentionally try to spend more money to earn more points in an effort to buy something from a rewards store as opposed to just treating it as a bonus. For the most part, you are spending more money this way I say if you are not treating these rewards as simply an extra bonus.

Here is a great example. Like many, I use a credit card that offers reward points. Let’s pretend you really wanted this mini blogger camera in the rewards store that I saw. It costs 2,350 reward points. I currently have about 2,175 which means I am short 175 points. What I would see here many times is that people will intentionally try to find something to buy to get those 175 points which isn’t the best thing to do I say.

For this rewards program you can earn one point for every $20 to $40 that you spend. To put it another way, unless there was a special offer, you need to spend $3500 to $7000 to get those points. That puts a whole new perspective in trying to buy that product with points. I did a quick check too and even saw that the retail price for the item was about $230.

Seems silly to justify spending say $3500 extra on things you didn’t really need just for a $230 item. By treating these reward points and offers as simply a bonus, you’d be surprised at how fast you can accumulate points. By the time you do seek to redeem them, it’s more of a pleasant surprise that you can get a free gift card or even something more high end like a computer. It can be a great way to get free birthday gifts and general presents for people as well.

If you really want to build up points though as you just need a few more, then do it the smart way such as asking people who would normally pay for things in cash to give it to you and instead you will use your credit card so that you can get the reward points. Surprisingly, most people are very receptive to this idea. Perfect example for myself is when family members are buying $200+ worth of groceries with the intent of paying in cash. That is a good scenario for you to get points without having to spend anything additional. A bonus should be something that puts extra money in your pocket and not out.


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