Which customer loyalty cards are still worth having?

Customer loyalty cards have long provided a bonus hit for shoppers - from discounts on the weekly shop and special offers to points to spend on treats, stores have almost raced to outdo one another with the best deals.

But the times, it seems, are a-changing with both Boots and Tesco making recent announcements about cuts to rewards deals.

From 14 June, Tesco customers exchanging clubcard points for a reward code (to spend on things like family days out) will get 2x the value, rather than the current 3x.

And from May, Boots' loyal shoppers will get fewer advantage points for the money they spend - though the company has said it is increasing the items included in the scheme.

Tom Church, co-founder of money-saving community LatestDeals.co.uk, told the i newspaper: “Tesco has said it’s reducing the value of Clubcard points due to rising costs. Boots said they’re changing to focus on giving more instant rewards. But the excuses sound wafty and they haven’t replaced the lost benefits in any meaningful way."

The cost of living crisis is showing few signs of abating; so how much value can still be found in loyalty cards - and just how loyal should shoppers remain?

Are loyalty cards still worth it?

With many shoppers turning to cheaper stores or cutting out non-essential items altogether thanks to sky-high inflation, loyalty cards don't appear to be offering the same appeal as they once did.

But, according to experts at Money Expert, loyalty cards can still bring worthwhile rewards, despite the recent cuts to several schemes.

"Whether a loyalty card is really worth it or not ultimately depends on the actual scheme, your shopping habits and whether you use that particular shop regularly enough. However, with lots of households struggling financially due to the cost-of-living crisis, customer loyalty cards are definitely still worthwhile," MoneyExpert told Yahoo News UK.

"They’re not just about racking up points to spend in store, they can also unlock exclusive discounts and other rewards that could save you money. However, these savings could be easily cancelled out if the shop’s prices are already quite high. It may be worth signing up to any schemes in the shops you already shop use regularly. However, we wouldn’t recommend changing any shopping habits just to earn points."

But the founder of financial website Household Money Saving urged customers to be cautious when it comes to shopping with loyalty cards.

"In my opinion, I wouldn’t shop at Tesco or Sainsbury’s or any of the supermarkets just because of their loyalty schemes," Peter Chatfield told Yahoo News UK.

"The value has reduced over the last five years or so, and I would advise using the discount retailers like Lidl and Aldi as their prices are often lower. And remember, the loyalty schemes are paid for somehow - probably through increased prices."

The best loyalty cards?

Consumer magazine Which? estimates that spending £100 and using a loyalty card could still bring savings of up between 50p and £10, at a time when the majority if people are feeling the pinch from rising costs.

Tesco was ranked by customers as having the best supermarket loyalty card scheme in November, according to a ranking by Moneyboat.co.uk, scoring 99 out of 100 for its clubcard rewards programme, followed by Sainsbury's in second place with 88 out of 100 for its nectar card scheme, while Co-Op polled in third place.

Meanwhile, money blog Save the Student also ranked Tesco as the best overall loyalty card, followed by Sainsbury's and Paperchase's treat me card - the highest ranking non-supermarket card on the blog.

Research from Which? compares each loyalty card on a number of factors including how much customers can save per £100 they spend - with Paperchase and Waterstones racking up an impressive £10 return on every £100 spent.

Iceland customers spending £100 with their loyalty cards saw a £5 return, Boots customers got back £4, and Lidl and Co-op customers saw a £2 return. Meanwhile customers at Tesco got £1 for every £100 they spent and Sainsbury's customers 50p.

However, many of the cards offered other perks, from in-store deals to charity donations - meaning benefits came to customers through more than just money back.

"Although Tesco has cut the value of its voucher scheme when you trade points with its partners, it’s still better value compared to Nectar at Sainsbury's. Both offer 1 point for every £1 you spend. However, at Tesco, a point is worth 1 pence and only 0.5 pence at Sainsbury’s," Chatfield said.

The existing consumer rankings, which consistently placed Tesco among the top-rated loyalty cards, may change however following Tesco's move to lower its points return for partner returns.

"Tesco’s popular Clubcard scheme is going to be hit with cuts that will reduce vouchers’ value for things like days out, for example, 500 points will convert to just £10 at participating partners instead of £15," experts at MoneyExpert told Yahoo News UK.

"However, it is still a great option for customers when it comes to saving money as you can rack up points which turn into vouchers and discounts in store, as well as fuel. They also have Clubcard+ which is £7.99 a month, but you get 10% off two big shops a month, this could be a great benefit if you do big shops, but be careful as you have to spend to ‘save’."