What started with frequent flier miles and store punch cards has expanded to nearly any product or service imaginable.  Businesses give reward points for credit cards, debit cards, traveling, staying in a hotel, dining at a restaurant, buying electronics, and more.  Companies realize customer loyalty is extremely important and they are getting more and more creative in the ways to earn and retain your business.

This is good news for consumers.  Getting something for nothing; “a free lunch,” is a nice perk.  Especially for a product or service that is necessary anyway; for example, your credit card, bank, or favorite restaurant.  One problem is trying to keep everything straight.  Many of us have eight punch cards or three of four credit cards that fall out of our wallets or purses when we check out.  If this sounds like you, it is time consolidate. 

What are the qualities of a good reward program?

Points calculated automatically.  It is often easy to forget to have a punch card punched or provide an "easy to remember" 12 digit account number.  A good program gives points without having to produce a card or account number.

It is easy to earn points.  Often people sign up for rewards programs and have no realistic chance at accumulating enough points to actually redeem them.  For instance an infrequent traveler signing up for a hotel’s frequent guest program is not a good idea because enough points will never be earned to redeem for a reward. 

More recently companies are tying together multiple products that allow points to be earned even faster.  One example of this type of program is getting points for using a certain hotel, airline, and rent-a-car company.  All of those points are tracked under one program and accumulate more quickly.  In the financial industry the trend is not only to give rewards points for credit card purchases, but also for debit card purchases too.  Anytime points can be earned in multiple ways, the value of the program is increased.

It is easy to redeem your points.  Redemption through an internet site, phone number and catalog all should be options.  Many people participate in travel programs that often have what is called a blackout period.  Blackout periods restrict or do not allow travel on certain dates.  The best rewards programs do not have these restrictions. 

You can redeem your points for something valuable.  Points have little or no values unless they can be redeemed for something of value.  Many companies require points to be saved to “register to win.”  Other companies may allow redemption for a T-shirt with their logo on it.  There is not a lot of allure to a “chance to win” or another T-shirt to wear around the house.  A good program should always allow redemption for something tangible and valuable. 

There is no cost to participate.  Avoid paying a fee to participate in a rewards program.  The most common place this is used is the annual fee on a travel credit card.  There are many cards that build points towards airline travel that do not charge an annual fee.

Rewards programs are great, but there is always the possibility of “too much of a good thing.”  Take a second to think about whether a rewards program has any value before enrolling.  Simplify things by just participating in a few programs; pick the best of the best.  And most of all don’t forget unless points are redeemed they don’t have any value!