Recession affecting reward programs

The economic recession is changing consumer behaviour in many ways, including how people earn and redeem travel reward miles.

The economic recession is changing consumer behaviour in many ways, including how people earn and redeem travel reward miles.

“There are changes in consumer behaviour in times like these in terms of how consumers ‘earn and burn’ their rewards,” said David Klein, vice-president of marketing planning and program development for Aeroplan.

On the “earn” side, consumers want to accumulate as many points as they can and are looking to get extra value for their normal behaviour and spending.

“Consumers are asking more questions about their purchases,” said Klein.

“They are looking for value and to get the most out of their money.”

Increasingly, consumers are maximizing their rewards by double- and triple-dipping — accumulating double and even triple air miles on the same purchase.

You can earn double miles by using an Aeroplan reward card or providing your Aeroplan number on purchases at partner organizations, and then paying for them with an Aeroplan CIBC or AMEX credit card to earn miles again.

You can get triple miles by providing your Aeroplan number when you purchase a selected flight on Air Canada, pay for the purchase on your affiliated financial card, then earn miles from the airline partner on the distance you fly. Aeroplan has seen a large increase in purchases made on its eStore.

By logging on and using their Aeroplan number, members can access more than 10 product categories from more than 70 retailers, including Dell Canada, Toys “R” Us, Tiger Direct and Chapters Indigo, and earn one mile for every dollar spent.

On the “burn” side, how and where consumers redeem their rewards are also changing.

Besides redeeming miles for flights, hotels and cars, more and more consumers are opting for non-air rewards.

Aeroplan members can redeem miles for apparel and accessories, books, music and movies, electronics and computers, gift cards, flowers, food, health and beauty, and home and garden products, luggage and sports and outdoor items.

“In difficult times, consumers are looking for more redemption options and are willing to dip into their accounts to offset costs,” said Klein.

For the more philanthropic-minded, there’s the opportunity to donate miles to seven Canadian not-for-profit organizations such as War Child Canada and the Stephen Lewis Foundation, and to support registered community charities or provide travel assistance for people and their families with medical or other emergencies.

There’s even a green option to redeem miles for carbon credits.

In difficult times, partners come to rely on reward programs to help stimulate purchases.

“Partners come to rely on loyalty accounts, which can act as a lever for sales,” said Klein.

In difficult times, loyalty goes beyond just the number of miles accumulated in a program.

“Being recognized becomes more important,” said Klein. “So-called soft benefits, like being bumped up to a higher class and priority boarding and check-in, resonate even stronger with consumers. Everyone’s looking for added value and to be treated nicely.”

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at boggsyourmoney@rogers.com.

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