It seems like every business today has some kind of reward program, and why not? Everybody loves them, whether it’s reward points from our credit or debit card, getting frequent flyer miles from the airlines, or that buy six coffee’s get the next one free at your local coffee house. We as customers always love to get discounted or even free “stuff.” Because I don’t use credit cards I don’t’ get to participate in their reward programs. But as I look more and more at the reward programs I’m currently participating, I realize that the “free” stuff I’m getting really isn’t that free and I’m not saving a whole lot of money. Take for instance the local rewards program I have at my nearby gas station.
The gas station provides me with a card that I swipe in the machine each time I buy gas before I swipe my debit card . In addition to saving $.03 a gallon I also accrue points on my card that I can later redeem for discounts on gas or gifts card. I earn points for each gallon of gas I purchase (10 points), food and drinks that I purchase (varies), as well as purchasing gift cards (500 points for every $25 purchased). The main goal for me is to get 200,000 points and that way I can earn a free $200 gas gift card. Sounds like a good deal right? But after calculating how long it would take to reach that goal I realized I’ll probably never get there.
Considering our gas budget is $175 a month and gas is currently around $3.25 a gallon, that means approximately we purchase 54 gallons of fuel a month or 540 points worth. That means it would take me about 371 months or almost 31 YEARS to get the 200,000 points necessary to get about one month of gas for free. How crazy is that? Even if I went ahead and bought $175 in gift cards each month for gas it would still take a little over 4 years and cost approximately $8,600 to get a $200 worth of free gas or about 2% of the total amount I would spend. Not to mention that I would be locked into purchasing my gas from that place and I could be losing out if there was cheaper gas right around the corner.
The gas station doesn’t mind however because it likes that I’m “trapped” into thinking that I always have to get my gas from there to save $.03 a gallon. Which on my car amounts to $.50 cents saved per fill up. So how much “free” gas am I really getting when I’m spending my mental energy thinking of ways to get that $200 gift card? With that being said, I’m still using the program to save a little on gas. But I’m realizing now it’s just a nice perk and it’s never going to change my life financially and I’m better off spending my time and energy on more productive things. It’s very easy to let reward programs consume us and make us think we are getting ahead financially. But if you think about it, it doesn’t save you that much money and won’t change your life. But it does make the business more money as it ensures you’ll be buying your gas, coffee, bagels, etc. there for years to come.
Have you ever been in a reward programing and looked at how much you were really saving?