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20% cash back at Sears with a Upromise credit card

Look what showed up in my inbox:

sears upromise

Time to load up on gift cards? Maybe not: see Frequent Miler’s post a few days ago. Apparently they’re tightening up on paying out for gift card purchases.

I have to say, though, I’m glad I have the Upromise card; it comes in handy every now and then. Incidentally, if you haven’t signed up for the portal yet Upromise is running another promotion where both you and I can get $20 if you sign up and make a purchase. Leave a comment below with the phrase “invite me” and I’ll send you a link. If you’re already signed up and want to recruit some friends, log in to your Upromise account and look at the right sidebar.

How dolphins game their rewards system for extra fish

So_Long_and_Thanks_for_All_the_Fish

I enjoyed this one. From an old Guardian article via Reddit:

At the Institute for Marine Mammal Studies in Mississippi, Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean.

Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

It’s the dolphin version of manufactured spending for unlimited 5% rewards! There’s more:

Her cunning has not stopped there. One day, when a gull flew into her pool, she grabbed it, waited for the trainers and then gave it to them. It was a large bird and so the trainers gave her lots of fish. This seemed to give Kelly a new idea. The next time she was fed, instead of eating the last fish, she took it to the bottom of the pool and hid it under the rock where she had been hiding the paper. When no trainers were present, she brought the fish to the surface and used it to lure the gulls, which she would catch to get even more fish. After mastering this lucrative strategy, she taught her calf, who taught other calves, and so gull-baiting has become a hot game among the dolphins.

Fortunately, credit card points and miles cannot be exchanged for fish, or we’d have to worry about greedy dolphins coming in and killing all the good deals.

How to make your rewards / loyalty program more evil

Congratulations! You’ve just been placed in charge of a loyalty program. Maybe you work for an airline, or a credit card issuer, or a retailer–no matter. Your boss just told you that costs are out of control and cuts need to be made. How do you maintain or even increase the perceived benefits of your program while reducing the actual benefits to the consumer?

In other words, how do you make your program more evil? Here are some ideas to help you get started:

  • Give the rewards an early expiration date. Spirit Airlines, take a bow! Your rewards last about as long as Rite-Aid’s!
  • Slowly erode your rewards currency with inflation. Giving out more points than you can afford to redeem guarantees you’ll have to devalue sooner rather than later. This time-honored tactic is particularly popular with hotel chains, as we generally see a few major devaluations per year from the big players.
  • Give out rewards, but keep redemption costs a secret. Delta Airlines has really pushed the envelope in this area and is a source of inspiration to evil marketers everywhere.
  • Make your program so confusing that MBAs have to sit down with a spreadsheet for an hour or two in order to figure out if there’s any consumer benefit. Key Bank is the gold standard here.
  • Run a normal rewards program, except multiply everything by five. That way you can offer your customers a 50,000-point bonus that’s really only the same as a 10,000-point bonus from other rewards programs. This is how PNC Bank rolls.
  • Add numerous terms and conditions to make it difficult for consumers to get value. The frequent flyer industry–not to mention the cottage industry of award ticket consultants–would not exist were it not for this tactic. Capital One’s marketing strategy is in part to position its products in opposition to this phenomenon. Which reminds me…
  • Call your points “miles” when they’re not actually miles. Miles, though difficult to use, have a certain cachet. Consider rebranding your credit cards points as miles to distract customers from the fact that you’re forcing them to redeem on travel instead of giving them cash back.
  • Blackout dates. The loyalty marketer’s best friend! And there’s a lot of way to skin a cat when it comes to blackout dates. For example, you can advertise no blackout dates for your standard products–but then reclassify almost everything you have as premium.
  • Add a minimum redemption amount. This all but guarantees the masses will collectively harbor millions of unredeemed points in their accounts. If you have a 5,000-point minimum redemption for your credit card program that pays out 1 point per dollar spent, that’s thousands of dollars of spending your customers will have to do to get their next reward! Suckers! (And as commenter MB notes below, Barclaycard just changed the minimum redemption for its Arrival Plus to $100. Well done, Barclaycard!)
  • Charge customers a fee in order to redeem. This is a great strategy for airline loyalty programs since customers have been trained to accept nickel-and-diming anyway. If charging everybody a fee is too evil even for an evil loyalty marketer such as yourself, you could just come up with a way to charge a lot of people, but not all of them, a fee. For example, many airlines charge you for using frequent flyer miles less than 21 days out. Nice going, United and American! And special praise goes to Delta for disguising its 21-day fee!

This list is by no means comprehensive, as the list of evil loyalty marketing tactics is too long to list here in its entirety. But hopefully I’ve given you enough to make your loyalty program a little more… evil.

dr evil

A list of Commerce Bank rewards credit cards

While it’s fun writing about the Chase Sapphire Preferred and the Hawaiian Airlines World Elite MasterCard, it’s also fun to dig into more obscure cards. We thus turn now to Commerce Bank and its surprisingly diverse (for a smaller player) credit card portfolio. I’ve written about Commerce Bank twice before: once in reference to its Garfield credit card, which has apparently been discontinued, and once to review the Sustain:Green card.

In a nutshell: there isn’t much to see here with the possible exception of the hotel card. You’d be better off with a simple 2% card like the DoubleCash or the Fidelity Amex than with any of these. But now that we’ve brought it up, let’s start with that hotel card:

The Drury Gold Key Club credit card: This card only gives one point per dollar spent, but consider this:

  • No annual fee
  • Benefits include best room available within classand possible room upgrades
  • 15,000-point sign-up bonus
  • Only one purchase is needed to get the sign-up bonus

Do any of you know anything about Drury Hotels? It seems like they’re mostly in the Midwest, though they do have a few here in the southeast. I checked one near me, and on TripAdvisor it was ranked #1 of 63 hotels in Greenville, SC. Redemptions are 7,500 to 15,000 points per room, so this one isn’t a way to rack up a lot of free rooms. But on the positive side, it’s a hotel card that’s not issued by Chase.

Special Connections Visa with Rewards: 1 point per dollar spent. No sign-up bonus. Pass.

Commerce Bank Miles and the Commerce Bank Visa Signature: 1 point per dollar spent. No sign-up bonus. They’re Visa Signatures, for whatever that’s worth. Pass.

Sustain:Green: See my review here. As the headline says, it’s “for environmentally conscious types who don’t understand credit cards.”

The Royals MasterCard and the Blues MasterCard: Can you guess the rewards earning rate with these cards? That’s right: one point per dollar spent. The St. Louis Blues card does give you two tickets when you sign up for it. Perhaps these cards could be used to console Missouri sports fans after the Rams move to Los Angeles? Otherwise, get a 2% card and use the rewards to buy tickets to support the Missouri sports team of your choice.

Kansas City Zoo Visa: Are you ready for a surprise? Here it is: this card earns one point per dollar spent! It does have four different designs, though. Unless you’re a huge fan of the Kansas City Zoo, you can pass on this one.

 

Hyatt, Hilton, Marriott, and Starwood by the numbers (aka why I love Hyatt)

Bloggers have spilled large quantities of digital ink arguing over which hotel loyalty program is better, whose points are worth what, and so forth. As with many aspects of the points-n-miles game, there is plenty of subjectivity involved since everybody has different goals. Another difficulty in such exercises is that different loyalty programs have different structures. Is there a completely fair and accurate way to compare all the major hotel programs?

The answer to that is most definitely no. But I did produce a spreadsheet and a neat graph if you’re interested. I looked at the number of domestic redemptions available in each category for Hyatt, Hilton, Marriott, and Starwood. Why domestic? Because that’s primarily what I’m interested in at this point in my life since there are four young ‘uns tagging along on trips with Mrs. PFD and I. (I’ll do another post with international if anybody’s interested.) Why only those four chains? Because they’re the biggest, and because as far as I know there isn’t a good way to get the relevant data for IHG. (IHG: The Delta Airlines of Hotel Loyalty Programs?)

Here’s what you get if you tally up the number of hotels for each category for the four major non-IHG chains:

hotels by category

And in case you need a reminder, here are the number of points required for a redemption at each level. In cases where a range is given, I give the midpoint:

hotels by category 3

I took each number from the first table above and converted it to a percentage of the total number of hotels for each chain and graphed the whole thing. Here’s the chart:

hotels by category 2

Observations:

  • Note that comparing the hotels isn’t strictly an apples-to-apples affair due to their having different numbers of categories. But that said, you can certainly do worse than this graph.
  • This is why I love the Hyatt program: plenty of low-level redemption options! As I’ve mentioned before, I loves me some category 1 redemptions on account of all the aforementioned kids, plus the invaluable assistance of my mother-in-law who often accompanies us on trips. Over half of all of Hyatt’s properties are either Category 1 or 2. Here are the category 1 suites we had in Atlanta last year. Don’t you ever change, Hyatt.
  • Hilton and Starwood have a more normal (in the statistical sense of the word) distribution. Starwood peaks at category 3 and 4, while almost half of Hilton’s domestic options are category 4. Almost three-quarters of Hilton’s hotels are in either 4 or 5.
  • Hilton’s Category 1 is a joke: two hotels. TWO! If you’re not going to Cleburne, TX or Columbus, GA, you’re out of luck. They even took away the Hampton Inn in Jacksonville, FL, and I’m still annoyed about that one since it’s right off I-95 and is exactly halfway between my house and Miami, FL.

every single domestic hilton category 1 hotel

  • That said, there is some value to be had (for some people, anyway) in Hilton Category 2 hotels given how easy Hilton points are to obtain. As a percentage of all Hiltons their numbers are small, and they’re not generally located in high-rent areas, but still: there are 79 of them. Odds are at least one of those is located near some place you would enjoy visiting.
  • Marriott has the most right-skewed graph with proportionally more aspirational redemptions than the other chains.
  • Starwood 1 and 2 are great values, especially on weekends. I wish there were more of them.
  • Again: this stuff is highly subjective. I look at all this information and think “Hyatt!” whereas somebody else might look it over and think “Marriott!”

Your thoughts?