What are loyalty cards

Many companies and store chains today are introducing loyalty programs. They have understood the importance of customer retention as it costs them 60% less to retain old customers than to find new ones.

You can avail of these cards at the stores and shopping centers where they have loyalty programs running for recurring customers.

So what exactly are these cards and how can they be used?

Loyalty cards are the cards that record your purchase each time you make a transaction at the particular store or retail chain which has offered you the card. Each time you swipe the card, you are given certain points and you can redeem them afterward in form of some special offer or discounts. The more you shop at these stores, the more points you get. These loyalty cards attract customers to the retailers and encourage them to shop more frequently at their stores and retail chains. This is done to retain old customers while also attracting new ones with these offers.

From a customer’s point of view, these cards can be very beneficial. These cards appear to reward you for shopping at a particular store. The more you shop, the more offers you can avail.

These cards can have various benefits and schemes which you might use to save money and get extra for what you pay.

Pros and cons of using loyalty cards.

Let’s quickly look at the pros:

  1. If you frequent to a particular store of a particular brand of retail store, then you can avail benefits for your recurring purchases like monthly groceries which is an inevitable basic recurring expense.
  2. You can avail exclusive offers which are not available to other customers and get more than what others get for the same amount.
  3. Big brands like Future Retail have these loyalty cards which are used across all their outlets which are spread across various categories like clothing, groceries, electronics, etc. So all your spending may be rewarded ranging from recurring expenditure like basic needs to some non-recurring expenditure like clothing, electronics shopping. Where ever you purchase among these retail chains, your points get added which can be redeemed later.
  4. You get free coupons like free movie tickets and shopping vouchers and can avail these at free from time to time.

But everything is not so good here. These programs have cons as well. These programs can get harmful for your personal finance. Let us look at the cons which you should consider before enrolling in these loyalty card programs:

  1. These programs were built to generate more revenue and they aggressively allure the users to buy more by imposing deadlines to redeem your points after which they expire. This creates fear in customers as they would miss out on offers they have earned due to collecting points and here people tend to make unnecessary purchases.
  2. To avail these cards, you provide your personal information to these outlets and since data security is not the core domain of these outlets, like banks, you cannot always trust their data security infrastructure. Your information might be leaked and you may be target of fishing scammers.
  3. You will only have to shop at the particular brand outlet which has issued you the card to earn points. Along the way you might be paying higher prices for the same product you can avail elsewhere at cheaper price just to earn points.
  4. The discounts and special offers which you get after redeeming the points,  might only be available for some unconventional items which you do not certain require or use. In most cases these programs are used to market such products to increase its sales.


If you concentrate on the pros, you can be benefitted. All you have to do is gauge if this scheme suits your lifestyle. If you already frequent a store or buy from a particular brand and have been doing it for a long time, then there is a chance that your choices are not going to change in a longer time frame. You can avail of the loyalty card schemes if this is the case as you will save on your usual shopping and spend less and benefit from the offers. You will be most benefitted if you use it for your basic recurring expenses like monthly groceries and other basic needs. To view it from the perspective of saving money on your daily expenses rather than winning a chance to buy something else for free. Avoid putting yourself in the position of spending more to get something else for a lesser price.