Smart Cookies

Hi Cookies,

For the past two weeks we’ve brought you the story of David and Kathy, whose Smart Cookie spending and saving strategy is now allowing them to live a life of adventure and freedom. Part of David’s spending strategy was playing the points game, double dipping and strategically spending to earn as many points as possible. Smart Cookie Angela expands on game of loyalty points in this weeks Globe and Mail. Read on to learn how to get the most out of what you spend.

Think Of Your Points Like Cash

Part of the method should be treating your points like cash. If you don’t collect loyalty points, you’re leaving money on the table. Let’s say you’re making a purchase that comes to $725. You put down $730, and the cashier says you’ve given her $5 more than you should have. Do you leave it on the counter and walk away? No, of course not, but that’s essentially what I did recently because I didn’t have a loyalty card with my regular grocer. I know it’s only $5, but it’s better than nothing and all it takes is a few minutes of paperwork to start the savings.

Track and Organize Your Points

If the thought of organizing and tracking all of your loyalty cards and points seems a bit much, then you’ll find such sites as Points.com helpful. This site lets you track balances and easily swap, earn and redeem your loyalty points.

Last month, MoneySense ran the numbers for seven major retail loyalty programs in Canada to find out which loyalty card provided the best rewards.

Shoppers Drug Mart came out on top, which wasn’t much of a surprise for me.

Remember The Smartest Way to Pay

I also think it’s smart to use point-earning plastic to pay for items – but only if you’re not carrying a balance on your card. All of the Smart Cookie’s use and love the membersip rewards with our AMEX charge cards. Double-dipping with a charge card and a loyalty program will help to stretch your dollar even further.

Crunch the Numbers

If you’ve got two stores with similar prices in your area, at which store should you be spending your money? Quick calculation: Ask yourself how many points you earn for spending $100. If you spend $100 at store A and you earn 100 points, that’s one point per dollar. If every 100 points earns you a $5 voucher, then that’s $5 per $100 in spending, equivalent to a 5-per-cent kickback program. You spend $100 at store B but you earn 1 point for every $2 spent. Every 100 points gets you a $5 voucher, meaning you have to spend $200 for a $5 voucher, equivalent to a 2.5-per-cent kickback program. Store A is twice as generous with its rewards. If their prices are comparable, make it a habit of stocking up there.

Run a similar calculation when redeeming your points for non-cash rewards. For example, if I log onto my Aeroplan account today, I can either redeem 15,000 points for a pair of Ray-Ban sunglasses valued at around $150, or I can redeem 15,000 points and catch a flight from Toronto to New York, a flight I wouldn’t likely find for less than $300. I’d rather pay cash for the shades and catch a free flight to the Big Apple: seems like a better use of points. I’m re-evaluating my strategy this week, in the hopes that I, too, become a little more addicted to the game of saving – a habit we’d all be better off for having.

What are your tips to maximizing your points? Oh, and have you checked out this genius invention from Money Group member Janet – she keeps her points cards for her and her family at her finger tips.

Enjoy a smart, rich and fabulous Thursday!

Your Smart Cookies