7 things to look for in loyalty reward programs

Patrick Sojka, founder of the rewardsCanada.ca website, explains the latest features being offered by rewards programs.

1. Booking on your terms: A feature primarily limited to credit cards, the ability the book your travel when you want and with whom you want is the hottest trend in the industry.

For many years, you could redeem your credit card rewards points for any travel, but it had to be through the credit card’s travel agency.

This new feature, which is only available on a small number of cards, allows the cardholder to book any travel with any agency, online or offline, and then redeem their credit card points against the charge on their statement.

2. Hotel reward programs: Most Canadians are familiar with frequent-flyer and retail loyalty programs, but most are still unfamiliar with hotel reward programs.

Despite the fact they have been around for nearly as long as frequent flyer programs, it is surprising to know that less then 20 per cent of Canadians belong to a hotel rewards program.

So the hotel programs are making a big push in the Canadian market, particularly with credit cards. In just three years, the market went from zero hotel credit cards to four.

3. Access to all seats: This trend developed out of two needs for frequent-flyer programs. One was to reduce the number of outstanding miles and the other was to tackle the largest perceived problem with reward programs: seat availability.

Most airlines now give program members access to any open seat, at a mileage premium. When reward seats at the standard or lowest mileage level sells out, members of many programs can redeem for the flights and times they want for a higher number of miles. The premium varies by program, with most charging double. Some, such as Aeroplan, charge from 30 to 200 per cent, depending on how full a flight is.

4. Non-travel rewards: With more than 1 trillion frequent-flyer miles being held in member accounts, airlines and other travel reward programs are looking for ways to reduce the number of outstanding miles and points.

Enter the non-travel reward. Most programs now allow members to redeem miles and points for merchandise, gift cards, financial contributions, charitable donations, etc.

This is useful for members who may never earn enough miles or points to pay for a flight, but would enjoy a night out at a nice restaurant.

5. Targeted Offers: Most reward programs have special offers only available to their members. Anyone can join these programs to take advantage of the offers.

Instead of miles or points, they offer rewards such as fly a certain amount of times and get a free flight, or stay so many nights with a hotel chain and get a free night.

Once you’ve been loyal to a program, chances are you will start to receive offers that are targeted strictly to you based on your past activities.

6. Buying, Transferring and Gifting: Just short of a few miles to get that free flight? You can top off your account by buying miles or having someone transfer them to your account.

Several airline and hotel programs offer this feature and more are being added every day.

This is an area where the buyer must beware. In many cases it can be expensive to buy miles, but if you only need a few to top off an account to get a $1,000 ticket for free, then it can be worthwhile.

Sometimes, airlines offer bonuses when you buy miles. For example, U.S. Airways currently has a 100-per-cent bonus offer for up to 50,000 miles, which means you can get 100,000 miles for under $1,500 — enough miles for a business class ticket to Europe, which would normally cost two or three times that.

7. Enhanced earning on credit cards: With the market for reward credit cards being extremely competitive, card issuers are finding creative ways to attract new customers and keep current ones loyal.

One the latest moves is to increase the amount of points or miles awarded on everyday spending. Typically, most cards offer 1 mile or point for each dollar spent. But some are now offering 1.5 to 2 miles for purchases at gas stations, grocers and drug stores, with a few offering 1.25 to 2 miles per dollar for all spending.

A couple of cards just offer 1 for 1 on spending but have increased what each point or mile is worth on redemption.