My name is Cassie and I am a recovering rewards addict. I'm serious guys, it was pretty bad. Every week I'd find myself in the beauty department of my local CVS (who has the mother of all rewards programs) snatching up anything that will earn me those glorious rewards dollars (cue the Hallelujah chorus!). Then I'd come back the next week promising myself that I would only spend what I had in rewards, and end up failing miserably.
Along with
store credit cards, loyalty or club cards are quickly becoming the norm for retailers. Whether it's the grocery, drugstore, or department store, you can't avoid having these "money savers" forced upon you. I love this excerpt from John Pinette where he details his struggles with customer service, retailers, and rewards cards:
You walk into a store you rarely go to and the cashier asks if you want to sign up for their rewards card. You politely decline, but the cashier continues: "Are you sure? You can save $2 on this purchase and you'll earn 25 points!"
You then feel incredibly stupid for not signing up to "save money" as the other customers in line shake their heads at your blatant ignorance. Has anybody else had this feeling? Did you feel like you were missing out?
Are these feelings validated? Definitely not. These programs actually make us spend MORE. Why?
The more you spend, the more you earn. The more you earn, the more you spend so you can earn even more. It's a never ending cycle.
A great example of this is CVS. At CVS they have what's called Extra Bucks that you earn from certain purchases. For example, spend $15 on Maybelline and earn $5 Extra Bucks. Sounds like a good deal, no? Not exactly. First of all, I'll end up spending more than $15 because no matter how hard I try, I can never get the total to reach an even $15. It's like CVS figures out the most impossible threshold to get you to spend a few extra bucks just to earn the reward.
Now that I've paid the $18 or so, I have now earned the $5 to spend on my next purchase. I don't know about anyone else, but if I get a $5 off coupon to spend on pretty much anything, I'm not going to pick out one $5 item. I'm going to pick out that $10 foundation or mascara I've had my eye on for a while. Or, there's now an offer on Revlon of buy 2 items, get $5 Extra Bucks! It's a trap, everybody! This is the way retailers want and expect you to think.
Can you see how this might become addicting or thought of as savings? What started out as an intended $15 purchase has now lead me to spend $23 (at least). Yeah, that's a GREAT deal.
Like with store credit cards, do you really think stores are pushing us to sign up for these programs because they want us to save money or because it makes them money? Definitely the latter. If a rewards program wasn't making the company a boatload of money they'd drop it in a heartbeat. They're not running charities - they're running businesses.
When you find yourself adding an extra item or two to your basket to earn that reward, ask yourself if you're buying it because you really want or need it, or if you're just validating the purchase because it will earn you a reward. If you answer honestly, you might not earn those rewards that make you feel special and valued, but you will save yourself a lot of money!
