Reward programmes are becoming an integral part of our day-to-day financial management. It is no longer simply about getting a discount on your next purchase; these programmes have evolved so that you can now earn really meaningful rewards, which many South Africans rely on to get by each month.

According to the 2021 South African Loyalty Landscape Whitepaper, by research and consultancy firms Truth and BrandMapp, South Africans belong on average to 8.7 reward programmes. This is a significant increase since 2014 when South Africans belonged on average to only 3.6 reward programmes.

In 2015, 67% of economically active South Africans used reward programmes, whereas that number has grown to 74% in 2021.

When it comes to what people use their rewards for, in most cases it’s on day-to-day basics, such as food, electricity, fuel, data/airtime, rather than on luxuries or treats.

Reward programmes help businesses to survive

Amanda Cromhout, CEO of Truth, says that while loyalty programmes are helping consumers manage during these difficult times, it is undoubtedly loyal customers who have helped businesses survive. Loyalty programmes are a win for both the customer and the business.

According to the Whitepaper, the most used loyalty programmes in South Africa are PicknPay Smart Shopper, Clicks ClubCard and Dis-Chem Benefit.

Checkers Xtra Savings in the fourth most used loyalty programme despite being a relative newcomer, only launching in 2019.

FNB eBucks is the most used non-retail loyalty bank reward programme with 36% of South Africans using eBucks. According to the Whitepaper, eBucks is rated by consumers as the “loyalty programme they could not live without.”

The paper found that most loyalty programme customers do not fully understand how multi-partner loyalty programmes work, which means many are losing out on the opportunity of earning points faster.

Customers could significantly increase their reward points across various partners by ultilising all the reward programmes. For example, an eBucks member who is also a member of Momentum Multiply who is shopping at Clicks could earn rewards with eBucks as well as increase their Clicks rewards by linking their Multiply membership to their Clicks ClubCard.

Spending at partners linked to the reward programme also provides further discounts.

Reward programmes put cash in your pocket

What has been an interesting trend over the last few years has been the increase in the number of reward programmes that offer cashbacks.

Cashback is the term used either when you get cash back immediately, or when you earn points which you can convert to cash to use wherever you choose. According to the Whitepaper, nearly 70% of South Africans using reward programmes value cashbacks as their number one benefit.

According to Dr Nceba Hene, head of loyalty and customer rewards at Old Mutual Rewards, most of their reward customers choose to convert their rewards points into cash, which they then withdraw from their Old Mutual Money account. This suggests that South Africans are using rewards as an additional income to meet expenses.

By being smart about how you use your reward points, you could use these cashbacks to achieve various financial goals.

For example, Momentum Multiply allows a member to transfer their cashbacks into their HealthSaver account to fund medical expenses. You could also earmark the cashbacks to boost emergency savings or start an investment. Many programmes allow points to be transferred to savings and investment accounts.

With such significant competition around reward programmes and the various opportunities to boost your earn rate, it’s worth spending time to make sure you are maximising your rewards and using them to achieve your goals.

While reward programmes like Clicks ClubCard and PicknPay Smart Shopper offer cashbacks, you can only use those reward cashbacks in store.

Many reward programmes now offer rewards which allow you to redeem points for cash, to be spent wherever you like. While you usually get more bang for your buck if you spend the rewards with a reward partner, you can still use the points to draw cash.

The banks

Absa, Standard Bank, Nedbank, Capitec and Discovery Bank all offer reward programmes that allow points to be converted into cash which is paid into one’s bank account. Absa, Standard Bank and Nedbank charge a “linkage” fee for the programme.

Most of the programmes start with 1% cash back when spending on a credit card which, in some cases, can be increased depending on your banking behaviour.

Absa offers additional earning benefits including Absa Small Business Friday where customers receive double cashback for shopping at their local SMEs on Fridays. There is also a double earn on Thursdays at Sasol.

Nedbank customers who link their cards to Greenbacks earn 1.1% on eligible spend and there are no tiers on this programme. Points are also earned when paying bills such as municipal accounts, DSTV and insurance. Greenbacks can be withdrawn as cash at an ATM or can be used to shop using the Greenbacks Shop card. Greenbacks can also be saved into any of the Nedbank savings accounts.

Capitec debit card holders earn 0.5% per transaction if certain banking goals are met, including having one credit product, funeral plan or fixed savings account of R10 000, having at least three debit orders, and completing five ‘money out’ transactions on the app each month. Capitec credit card holders automatically earn 1% per transaction, but this can be increased to 1.5% if they also meet the banking goals.

Sanlam Money Saver credit card
Cost: No additional fee above the monthly credit card fee of R56

Sanlam’s Money Saver credit card is a newcomer and has a significant cashback benefit in the form of a Wealth Bonus.

Andre Fredericks, head of Sanlam Rewards says the aim of the reward programme is to promote savings. The card works as a “save as you spend” benefit. If a customer commits to saving 2.5% of each transaction, Sanlam matches this with an additional 2.5%, bringing the total Wealth Bonus to 5%.

For example, if a customer spends R1 000 on their card, an additional R25 is deducted from their card and transferred to the savings account. At the end of the month, Sanlam contributes an additional R25, bringing the total to R50. This Wealth Bonus is only accessible quarterly or annually.

Where the customer uses a Sanlam spend partner, the 2.5% is not deducted from the customer’s card but is paid by the partner. A customer can select not to make a 2.5% contribution and they will still earn 1% as a Wealth Bonus when they use their card.

If the customer spends at a partner, a total of 3% is added to their Wealth Bonus. Fuel rewards are calculated differently, earning R1 per litre of fuel when filling up at a Total fuel station.

The co-saving option only works if you pay the credit card in full at the end of each month. If you are allocating an additional 2.5% of your credit card spend into a savings account and then being charged interest on the outstanding balance, this reward programme would be costing you money.

Discovery Vitality
Cost: R99 – R305 per month

This reward programme is only financially viable if you use the full range of discounts available and not just the cashbacks. Cashback can be earned at PicknPay and Woolworths for spending on healthy food, and at Clicks and Dis-Chem for spending on various personal care items.

If the member is also a client of Discovery Bank and has Vitality Money, the food and pharmacy cashbacks (as well as fuel and Uber cashbacks) are earned in Discovery Miles, which can be converted directly into cash, or can be used at a better rate for buying vouchers at various retail partners. Vitality members can also use their Miles to boost their medical savings.

Momentum Multiply
Cost: R278 per month

Like Vitality, Momentum Multiply only makes financial sense if you are using the full programme and discounts which includes cash rewards for Momentum Health members who earn cash by exercising and staying fit.

You will automatically get your cashbacks into your Multiply Money savings wallet when you shop at cashback partners which include PicknPay, Woolworths, Dis-Chem and Clicks. You also earn cashbacks through Multiply online shop partners.

You can spend the funds either by paying into the payment wallet and using your Multiply debit card, or you can opt to pay the cashbacks into your Momentum HealthSaver account if you are a member of Momentum Health.

Old Mutual Rewards
Cost: Free

Old Mutual Rewards does not require you to have an Old Mutual product, although the rewards benefits are higher if you do.

You can earn up to 4000 points (R400) through various activations which are designed to improve your financial knowledge.  You also earn 1% of your spend if you have an Old Mutual Money account as long as you swipe five times a month with a minimum of R100 per swipe and have one debit order.

Old Mutual Rewards does not provide a discount on your Old Mutual product premiums but rather pays you reward points. Points can be converted into cash and paid into an Old Mutual Money account or can be used to save in an Old Mutual Unit Trust account.

Extra fuel rewards

While most banks are offering fuel rewards, FNB, Old Mutual Rewards and Absa have announced additional reward benefits from July to the end of September 2022, to help mitigate the higher fuel prices.

As with all fuel rewards, first check that the fuel station is a participating partner. Some garages are franchises and they may not be part of the agreement with head office.

FNB is offering an additional R2 per litre of fuel across all levels of eBucks if customers use their virtual cards to pay at Engen. A virtual card needs to be linked to a payment platform. This can include FNB’s Tap to Pay on the app or you can load your virtual card on Apple Pay, Samsung Pay, Fitbit Pay and Garmin Pay. This benefit is available to customers irrespective of their reward level and is in addition to what they would have ordinarily earned.

A customer who uses FNB Aspire would ordinarily have earned 60 cents per litre at Engen, but due to this additional benefit, they could earn R2.60 in eBucks until 30 September. Similarly, Private Banking and Commercial Banking customers who normally earn up to R4 per litre at Engen could earn up to R6 per litre for the limited period.

Similarly, FNB customers who swipe their Clicks ClubCard at Engen when filling up will earn an additional 10 cents per litre in Clicks ClubCard points.

Old Mutual Rewards will be providing an additional 25% of value when redeeming points for vouchers at Total fuel stations. Usually, 10 Old Mutual Reward points equal R1 of value, but for a limited time, when purchasing fuel vouchers, you will receive R1.25 of value per 10 points.

Last year, Absa introduced double cashback on Thursdays at Sasol, and is now offering an additional 10% cashback on fuel spend for members, until 16 October 2022.

This article first appeared in City Press.