Good things for reward-point holders who wait

When it comes to collecting points, Canadians are more patient than U.S. peers
April 10, 2008
Terrence Belford

Stephen Brown loves his Aeroplan rewards miles. They've taken him to Whistler, B.C., for three days of skiing, to Italy for two weeks, including a week of cycling in Tuscany, and to Australia with his mother for a family wedding. This fall, they will pay his way to Athens.
Louis Intini, a retired schoolteacher, says his two sons laughed when he first got an Air Miles card a decade ago.
"They said I would never use the points," Intini says. But his rewards points have taken him and his wife, Geri, to Rome and Barcelona. They paid for his flight to Singapore in 2002. He even gave his mother-in-law a $100 food certificate.
Gary Himmel, a chartered accountant and entrepreneur, just wishes he had more time to take advantage of all the rewards points he has toted up on his Royal Bank Avion Platinum Visa. In the past, before he launched his new venture, Ezone, a corporate team-building centre in Etobicoke, he could get away on a holiday at least once a year.
This year, the flight rewards have gone to his wife, Paula, and their two sons, both university students. Those RBC rewards points have paid for each of them to fly to stay with family in Fort Lauderdale, Fla., and will cover Paula's airfare from Toronto to Warsaw next month, then on to Tel Aviv.
What ties these three very different men together is their passion for collecting travel rewards. It is a distinct Canadian trait, says a recent survey by Colloquy, a market research company based in Cincinnati, Ohio.
"Canadians are very different from their U.S. counterparts when it comes to loyalty programs," says Rick Ferguson, editorial director for Colloquy.
Canadian consumers are more patient, more willing to accumulate large numbers of points to get the reward they want, instead of going for quick redemptions for small items, says the survey.
Canadians favour travel first and then merchandise when it comes to rewards, while 55 per cent of Americans go for loyalty programs offering cash back.
The survey also found that Canadians are more generous than their U.S. counterparts. They are about twice as likely to redeem a reward for someone else and they like to share rewards with family and friends.
So, who collects loyalty rewards? Colloquy breaks Canadian consumers into five groups and finds that 96 per cent of Canadians with incomes of more than $125,000 collect; 95 per cent of women with incomes between $50,000 and $125,000 belong to rewards programs, as do 90 per cent of seniors, 78 per cent of young adults and 86 per cent of the general adult population.
"Canadians are much more savvy loyalty program players than their U.S. counterparts," Ferguson says. "They are more likely to belong to and participate in competing programs. That means makers are under constant pressure to create differentiated, unique offerings."
Brown would rank himself among the affluent collectors and agrees you have to be clever about maximizing reward benefits.
At 40, he is vice-president and general manager of a marketing company with clients such as CIBC, Canadian Tire and GE. He collects about 100,000 Aeroplan miles a year on his CIBC Aeroplan Gold Visa card.
"It is mostly through spending," he says. "I do get miles from flights but they are mainly short haul. I put all my business and all my personal spending on my Visa card. I have an Air Miles membership as well but seldom use it.
"To get the most benefit, you really have to concentrate all your spending on just one card and one program."
Intini knows all about concentrated spending. He may be retired but "I spend like mad; I just love shopping."
He has an Air Miles card, a BMO Mosaik MasterCard with Air Miles reward plus, an Aeroplan membership and a CIBC Aeroplan Gold Visa. The Air Miles cards he uses for everyday shopping and the Aeroplan cards for travel.
"I used to use my debit card for most things, then I started using that Mosaik MasterCard and boy, once I saw how the Air Miles added up, I switched to putting everything I could on credit cards," he says.
"Right now, my wife and I are saving points for a trip for two back to Europe. I would guess we collect maybe 6,000 or 7,000 Air Miles a year and right now I have 90,000 points on my Aeroplan card."
Himmel sees the points he collects on his RBC Avion Platinum Visa as a terrific way for his wife and sons to stay in touch with family. His in-laws have a place in Fort Lauderdale and the points he accumulates by putting $5,000 to $10,000 a month on his credit card are usually more than enough to cover air fares twice a year.
He puts almost everything he can for personal and business use on the card. With five cellphones and sophisticated Internet and cable service from Rogers, that mundane monthly bill can sometimes approach $1,000.
"What I do is go on the web, search out flights and prices and then, when I choose the one I want, I just call the RBC travel office, book the flights and pay for them with points," Himmel says. "I know that 30,000 points equals $750, which is a great rate, so redemption is easy for me.
"Paula's trip to Warsaw and Tel Aviv will be the first time we paid for Europe on the points. I am still trying to figure out if I can get away long enough to go with her," he says.