It’s been a long time since 1958 when Canadian Tire first introduced Canadian Tire Money, Canada’s iconic loyalty program. Since then, retail loyalty rewards programs have become ubiquitous. Canadians are members of 8.2 loyalty programs per household, according to a recent study by Colloquy. Canadians belong to everything from air miles and visa rewards, and to retail loyalty programs. Compare that to Americans who are enrolled in an average of 7.4 programs per household. The question we had is, what are the top 15 most popular loyalty rewards programs in Canada and why do Canadians choose one loyalty reward program over another.
First, with respect to the most popular loyalty programs in Canada, the breakout of the top 15 by membership size, according to Abacus are as follows:
1. Air Miles
2. Shoppers Optimum
3. Canadian TireRewards/Money
5. HBC Rewards/Hudson’s Bay Rewards
8. Club Sobeys
10. PC Points/PCPlus
13. Esso Extra
15. RBC Avion
It’s notable how many different types of loyalty programs make the list. There are two coalition loyalty programs, Airmiles and Aeroplan in the top five loyalty programs in Canada, and the rest are associated with a retailer. Only two loyalty programs, Indigo’s Plum and Metro’s metro&moi, don’t have credit card programs (visa rewards) associated with it. Two programs, PC Points and RBC Avion, are credit card only. Four of the loyalty programs (Shoppers, Scene, Air Miles and Aeroplan) offer the opportunity to accumulate points through a debit card. Debit seems to be an area loyalty programs are trying to expand their payment vehicle to. It will be interesting to see what they do with mobile payments. The one category that is missing is telecom. Rogers is rumored to be unveiling a loyalty and credit card program soon, which makes all the sense in the world as telco competition heats up and they focus on reducing churn as opposed to net new subscribers. Lastly, we can see that travel as a redemption offering also makes-up a heavy component of the list, with Aeroplan, Avion and Air Miles offering travel rewards.
Despite the fact that Canadians have lots of loyalty program memberships, they are typically only active with a few. The top two reasons Canadians don’t change programs are fees, which tend to only apply to credit cards, and the perceived time it takes to earn the consumers desired reward. That’s probably why Air Miles does so well. Despite the fact that it doesn’t offer the best value per dollar spent, the fact that it gives 15 points per dollar spent, is more attractive to the cardholder than a program that offers 1 point per dollar spent, regardless of the fact that the 1 point may be twice as valuable as the 15.
The best way for Canadians to maximize their loyalty points is by pairing them up with a Canadian credit card. For gas, drugstore & grocery loyalty programs, we suggest using a cashback credit card. Cashback credit cards now offer up to 5% back on gas & groceries, and up to 2% back on drugstore purchases. Combine that with the use of a loyalty card, which provides an additional .5% to 2% of value, and you could be earning as much as 6%-7% cashback for each purchase!
There’s definitely value to be had by using loyalty programs. Just don’t lose the forest for the trees. If a box of cereal is $2.00 of at one grocery store compared to another, don’t go to the other because you’re collecting 45 points, which add up to about $.45 to $.60. Use rewards programs in a way that maximize your savings, not the retailers earnings!