A number of things have changed over the past couple of decades when it comes to retail. One: Branding is everything and can dictate whether a product sells for $99 or $249. Two: For the majority of Canadians, many things that were considered ‘luxuries’ have become ‘needs’. Three: Rewards are top of mind and can significantly influence purchases.

Rewards Programs-What to do So, you married your “money-opposite” – join the club! One thing is certain – getting aligned on your financial life will bring riches to your married life.

Today I am going to focus on this last observation. The average number of rewards programs that a Canadian is enrolled is now 8.2 according to a 2013 Colloquy Loyalty Census. Canadians are a savvy bunch when it comes to where they spend their dollars, and this only seems to be heating up the rewards space.

Rogers First rewards program just launched last month, as did Loblaws’ PC Plus rewards program to much fanfare; Aeroplan has become one of the most fought-over programs in Corporate Canada (TD Canada Trust becoming the most recent ‘winner’); Air Miles continues to influence the buying behaviour of Canadians as the biggest rewards program; and Shoppers Optimum has become the #2 rewards data base in the country with over 10 million members (which, by the way, Loblaws will now look to leverage as part of their corporate take-over).

Every Credit Card company manages or partners with multiple rewards currencies (as an example, American Express promotes 6 different rewards programs to different customer segments), and of course the #1 reason customers cite for picking a credit card these days is the rewards program attached to it.

So what is a person to do when determining how these rewards programs fit in their wallet? Is it really worth going out of one’s way to pick up points that may or may not be redeemable some day for something of value?

Most big retailers have some form of free rewards program – and there’s not much downside from becoming a member as long as you don’t mind sharing your personal data and you have a wallet big enough to carry all the cards. Here is the current Top 10 list of rewards programs based on a 2013 Abacus Study of Canadians’ 3-month activity:

  1. Air Miles
  2. Shoppers Optimum
  3. Canadian Tire Rewards/Money
  4. Aeroplan
  5. HBC Rewards
  6. Petro-Points
  7. Scene
  8. Club Sobeys
  9. CAA
  10. PC Points/PC Plus

When it comes to credit card purchases, I am a big fan of linking up your favourite rewards with a credit card that issues the same points currency – but with one important caveat. I never encourage clients to use credit cards until they have complete control over their spending habits. If you can be enticed to purchase something ‘because of the rewards’, I would recommend you put the credit card away.

The customer value of most credit card reward programs falls somewhere between 0.5% and 3.0% of the purchase, depending on many factors. If you can be enticed to spend even 5% or 10% more because of the rewards factor, you may actually be worse off by making the purchase. And guess what? Statistics prove that Canadians can spend up to 20% more when rewards are attached to purchases – so beware!

Can you think of something worse than purchasing 20% more than you need to, and paying 18% in annual interest charges, for the privilege of reaping 2% back in rewards? Doing the math should stop you in your tracks.

And when it comes to redeeming rewards, keep in mind that some rewards aren’t ‘free’. When you book a flight on Aeroplan Miles or Air Miles, you will still need to pay the applicable taxes and fees (which, for a flight from Toronto to New York, will run about $200 per return ticket).

Most rewards programs offer a night out at the movies, free groceries, cash-back, travel or merchandise. Whether you use them for luxuries or simply to offset your cost of living is entirely up to you. There’s a really good feeling that can come from redeeming for a reward that you wouldn’t have otherwise received were it not for the rewards program, but again be aware of how this could change your purchasing behaviour.

If you’re not sure what rewards program is right for you, a tool has been created by Environics Research Group to help sort out all the programs and prioritize the three that might be best for you: www.compareloyaltyprograms.ca

Of course you should do your own research too, but this site might help narrow down the list.

Above all, recognize why there is so much corporate value in these rewards programs. There is a reason free things are being offered to you. The value is in the data – the customer-level/transactional-level purchase information that can help marketers tailor offers to their customers. What you receive in your real and electronic mail boxes are offers that are meant to influence your behaviour and result in the mailer grabbing a higher share of your wallet. Simply knowing that fact will be like a filter, helping you to maintain control over your spending.