The pros and cons of customer loyalty programs

Who doesn’t love a good deal? Have you ever dug deep into your wallet for something and instead found that rumpled buy-10-get-one-free punch card from your favorite frozen yogurt shop that closed three years ago? Thought so. And, you’re not alone — 80 percent of Americans choose to participate in a customer loyalty program.

Not sure which loyalty programs to join or how to avoid them getting lost in the depths of your wallet? Here are three pros and cons to keep in mind:

1. Pro: You may get better deals or exclusive savings.
   If you’re a frequent customer, it’s usually worth it to join the rewards program. Pick up that old-school punch card from your favorite local coffee shop; if you can’t resist your daily caffeine fix, you could earn a free latte every couple of weeks. And if you tend to frequent the same grocery store, pharmacy and hardware store, joining the loyalty programs can often mean you get special discounts or earn points toward coupons or cash back — just for shopping where you were going to shop anyway.
   Con: You may increase your spending.
   Some people may get excited about earning rewards and end up spending more than they usually would. It’s best to try and shop like you normally do. If you only shop at a clothing retailer once or twice a year, you probably won’t earn points fast enough to redeem significant rewards. It may also result in putting undue pressure on yourself to spend money at a place you don’t usually go.
2. Pro: You’ll get the latest information on sales and offers.
   It’s wonderful to stay in the know on the latest and greatest deals, especially around the holidays or times your favorite store is running a special. Having it all right in your inbox is also convenient.
   Con: Your inbox will be flooded.
   Anytime you share personal information you’re likely to end up with more spam in your inbox, and there’s always the risk of having your identity compromised. So focus on the retailers you use the most and skip the rest.
3. Pro: Most of them are free and easy to use.
   With just a few items of information, you’re in. Unlike a store credit card, there’s no commitment or financial qualifications you have to meet.
   Con: Your wallet or purse can get bogged down with the volume of cards.
   Use an app to track your rewards. If you belong to lots of loyalty programs — particularly for hotel or airline points —  an app can be invaluable. Eliminate those cumbersome keychain cards by scanning them into Stocard or Key Ring instead. You can track all of your loyalty points in one place —  and even convert them from one program to another or redeem them for gift cards — by storing all of your loyalty accounts on Points.

Check out these recommendations for some of the best loyalty programs.

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