I have a habit of keeping invoices for far too long that have no use, at least in appearance, you will quickly understand why.
These scraps of paper can sit at the bottom of my purse for months while waiting for a cleaning session. So on a big sorting day, it was 2010, I came across an old Pharmaprix invoice.
My gaze fell on the chart on the back, which shows the value of reward points from the Optimum Loyalty Program. I then noticed that the value of the points had changed. It had diminished, to be precise.
Pharmaprix had not warned anyone. So my discovery ended up in the newspaper. Option consommateurs then filed a class action and in 2017, an agreement was reached between the parties. Thousands of Quebecers have received compensation in the form of points.
I’ve thought back to that story about the value of points three times in the past few days: when Air Miles sought protection from its creditors, when I received an email updating the Scene+ program, and when I wanted to buy a plane ticket with my Aeroplans.
You have to face the facts, the value of the points never increases.
However, we often tend to play the hoarding squirrels with our points and to imitate the hedonistic cicadas with our money. “We must do the opposite! wrote me Jerome, a reader, comparing reward companies to “really bad central banks” that constantly devalue their “currency”. In fact, it is better to hasten to spend your points.
“It’s something I’ve been saying for years, it’s one of my key phrases: points are not RRSPs, use them! “says Jean-Maximilien Voisine, founding president of Milesopedia.com, a site specializing in rewards programs. In his opinion, it is even “mathematically impossible” for a program to announce an increase in the value of its points, given the imperatives of profitability, acquisitions and mergers that occur.
Moreover, at the very moment when Scène+ is entering IGA, we learn that the points will lose value on June 19.
The change affects Quebec residents holding a card as of December 13, 2021. The goal, it is said, is to “harmonize redemption rates for all Scene+ members across Canada.”
The deprecation isn’t widespread, but it does apply to two popular uses: account credit and the purchase of merchandise from Apple’s and Best Buy’s catalogs.
To obtain a credit of $300 on his Scotiabank card (debit or credit), for example, 43,000 points will be required, rather than 37,500 currently. For the purchase of an iPad or a video game console, 145 points will equal $1, rather than 127. A difference of 12%.
For its part, the Bank of Montreal ensures that its “purchase agreement” of Air Miles does not change anything for the holders of the blue card. But that’s not a long-term promise. Will the financial institution want to merge its BMO Rewards program with Air Miles to simplify its business? If necessary, the risk of devaluation is not zero.
This was seen with Marriott Bonvoy, the world’s largest loyalty program in the hospitality industry. After the purchase of the Starwood chain, we went from an exchange grid operating with a fixed number of points, depending on the category of hotel, to dynamic pricing based on supply and demand. As a result, the number of points required for a free night has generally jumped.
The same thing happened with Aeroplan. Three years after an outright devaluation of points, especially for first class travel (in 2015), the program moved to dynamic pricing for flights with Air Canada. The flexibility of the program has improved significantly, giving access to all seats, but this is costly.
Not so long ago, we were going to California with 50,000 Aeroplan points. To make the trip in May, with a suitcase, it would rather take 77,000, about 71,000 in mid-July and 68,000 next October, according to research carried out in recent days.
The ideal is to plan a strategy for using your points over a year or two, maximum three. It is a mistake to want to wait until you have enough to get a completely free trip, insists Jean-Maximilien Voisine.
It makes more sense to reduce your bill by redeeming points for hotel nights, car rental or a single plane trip. In addition to devaluation, it also happens that programs change their exchange conditions or partners. And in some cases, the points expire.
The same reasoning applies to gift cards. More than ever, because of inflation, it is better to spend them quickly since they are constantly losing their purchasing power. Their value can even fall to zero suddenly during a bankruptcy.
For once, the cicadas are right.