Last month, Discovery announced the introduction of a new e-currency in the form of Discovery Miles, for its ‘universe’ of banking, health and insurance products.

Discovery claims that the new rewards system will give consumers more spending power than before because they can accumulate them across the various Discovery products. There are also more partners where you can redeem the Miles, as well as the ability to exchange Miles for cash. But is the system fair and are customers happy with it?

Why the change?

Dinesh Govender, Discovery Vitality CEO, claims the hype over Discovery Miles that were offered on the Discovery credit card is what fanned the idea to roll it out across other products. While Vitality has been successful in many respects and incentivised customers to exercise more, he believes that behaviour has changed, and customers now suffer from ‘smoothie fatigue’.

He explains: “If I offer a coffee in 1990 the odds of customers wanting the same in 2020 will be lower – you’ll get bored of it.”

But one commentator who preferred not to be named pointed out that rewards schemes are often changed to improve a company’s commercial model. “The reason they change is that they are not making money or it’s costing too much to maintain. If you change the rewards then customers don’t use them as much. You may generate more animosity toward the company, but these programmes would go out of business if every one of us redeemed our points.”

75% of South Africans who earn at least R10 000 a month belong to one or more of the over 100 loyalty programmes in South Africa.

An example of this is Momentum’s rewards programme Multiply which this year dropped Takealot as a partner. Top-tier members earned significant discounts and this was a drawcard for the programme. Multiply clearly felt differently from Discovery about offering free coffees, as this year for the first time it has introduced vouchers for Wimpy coffee based on your weekly physical activity.

How does it now work?

Discovery Miles can be spent on things like coffee, smoothies, gifts, gadgets, shopping vouchers, travel rewards and more. Govender explains: “With Discovery Miles you can still earn in the same way through personal health, saving money and good driving habits. The Miles are also easier to spend and to retain. While the old Vitality Rewards points expired in 12 weeks if they were not used, Miles are valid for five years.”

You earn 100 Discovery Miles once you have achieved your weekly health, money or drive goal, and you get a play on the gameboard for each goal achieved. “It’s like a lottery system,” explains Govender. You always win at least 50 Miles, and can win as many as 300 Miles on the gameboard.

Discovery is also set to introduce Vitality Active Rewards for kids and teens. The company said that children will be able to look forward to “interacting with various age-appropriate health and fitness activities” and “earn their own Discovery Miles for moving more, understanding their health and eating more healthily.”

Why are some unhappy?

Many customers are dissatisfied, and complaints vary. Some on social media accused the financial services institution of diluting its offering, saying only customers that took out all the Discovery products could benefit from the system. There was a general feeling that the new system design is to encourage the use of Discovery Bank. There were complaints surrounding the complexity and duration of earning points.

Arthur Goldstuck, head of World Wide Worx, agrees with users who feel it’s hard to understand: “The system is made complicated by having numerous elements, levels and terms, as well as the complexity of navigating both the website and the app. Little attempt is made to differentiate between rewards and reward status, which have now been separated quite aggressively but without communicating this separation effectively. The system obviously makes sense to those who devised the it, but it is poorly communicated to customers.”

Meanwhile, one reader complained that the purchase of vouchers costs more using Discovery Miles than they did under the Rewards system. She also complained that lots of healthy food purchases from Pick n Pay have fallen through the cracks.

However, Govender maintains that most of the problems have related to Discovery Miles being exchanged or used with new partners, such as Makro and Uber.

He adds: “Individual issues with Makro and Uber have cropped up from time to time. But we encourage customers who’ve had any issues with Discovery Miles to contact us via email or our helplines and we’ll resolve it.”

South Africans have become big users of rewards programmes which, if used properly, can be hugely beneficial. But as the true costs of the rewards are understood by the company, cuts are often made. Or to be more cynical – some offers are just there to increase membership and then eventually cut back. There also seems to be a move away from just behaviour-based rewards, to product sales. Vitality is not the only programme receiving criticism. FNB’s eBucks requires more product ownership – such as life cover – to increase tier levels.

If you are going to join a rewards programme, especially one you must pay for, make sure you understand how it works and that your normal behavior will be sufficient to earn rewards. If the progamme works on a tier system, make sure you understand what activities or products you need to have in order to make it worthwhile. Also check their partners are places you normally shop from. There is no point getting a free Wimpy coffee if you are seldom near a Wimpy.

44 weeks to get a free flight?

We demonstrate how a it could take almost a year to earn a return flight from Johannesburg to Cape Town, even if you’re at the top of the Discovery Miles game:

Flight cost
Base flight: R490
Flight taxes & fees: R1 021.72
Discovery booking fee: R80
Total cost: R1 591.72

*Applies to a flight taken on 4 February, 2020. Figures correct as at 27 January, 2020

How to get your free flight:

• Ramp up your Vitality status: You can save between 15-35% on flights through Vitality depending on what your Vitality status is. Of course, the higher up you are the more of a discount you’ll get. For example, if you’re at the top with diamond status you’ll get a 35% discount on your flight; if you’re blue you get 15%.
• Become a Discovery product fan: Loyalty to the brand earns you more discounts. Govender explains: “A further 40% discount can be achieved through being a Vitality Health member and a qualifying Discovery Bank client with the Vitality Money programme.”
• Achieve your goals: You can earn at least 150 Discovery Miles every week, and use these miles to pay for the balance of the flight price.

Crunching the numbers: According to Discovery’s Govender, you can get up to a maximum of 75% off using your Vitality status and signing up to other products. But this discount only applies to the base flight fare and certain taxes. With this particular example the discounts and diamond status level would reduce the price to R658. To get a free flight you’d have to earn R6 580 Discovery Miles. “This would take you 44 weeks of hitting one goal with 150 Miles earned per week,” says Govender.

This article first appeared in City Press.