Loyalty bonuses go unclaimed

13 April 2012

SHOPPERS are sitting on a £2bn loyalty card goldmine in unclaimed goods and discounts. Experts say many Britons have more 'money' in the form of loyalty card currency than they do in the bank.

Britain's wallets now bulge with 27m loyalty cards - the average home has at least two and 7% have more than 20.

But up to a quarter of cardholders never get round to redeeming the points they tot up, says a report by market experts the International Consumer Loyalty Programmes.

That means that of the £2bn currently lying unclaimed, an astonishing £460m is likely to remain that way permanently.

Worldwide, there is a staggering £500bn on loyalty cards, which has led to experts describing a new currency called 'the reward dollar'. The schemes encourage shoppers to use particular banks or retailers by offering points linked to how much is spent.

The points are totted up and can be exchanged for vouchers or goods. In many cases they 'buy' frequent-flyer miles, discounts on shopping, gadgets and treats such as a family trip to a theme park. Some consumers are so dedicated to 'getting something for nothing' that they will shop at the same supermarkets and petrol stations and stay at the same hotel chains to rack up points.

The ICLP says one reason for so many points staying unclaimed is that consumers are more interested in a free gift than a store discount. A spokesman said: 'If the money was in the bank they were more likely to spend it.' Others simply forgot that they were accruing points.

Critics of loyalty cards will say the survey shows that consumers increasingly reckon the benefits on offer are too small to bother with.

POLL: Do you claim your loyalty points?

The loyalty card market has expanded dramatically since Tesco launched its Clubcard in 1995. Shoppers get one point for each £1 spent, and spending £250 would generate vouchers worth £2.50. But critics say the money spent promoting and operating loyalty schemes could be better used on simply chopping prices.

A study by the Institute for Grocery Distribution last year found that 38% of shoppers refuse to have a loyalty card and another 10% rarely or never use them. Very few claimed bonuses such as holiday discounts and theme park trips. The Institute said: 'Typically factors such as price, quality, service and convenience make a far greater contribution to fostering a loyal shopper.'

Case study

Mother-of-two Julia Hamilton has a fistful of cards which generate points and offers. But she never redeems any of them. The 40-year-old divorcee from Haslemere, Surrey, estimates that she spends between £6,000 and £8,000 a year on her three most-used cards alone.

But she said: 'Claiming bonus points and free gifts simply seems too much effort and paperwork. And loading up your wallet with 50p supermarket vouchers is more trouble than it is worth.'

TOOLS: Compare credit cards and loyalty schemes

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