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Pattie Lovett-Reid

Chief Financial Commentator, CTV

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The first sale to a customer matters, but not as much as the second, third and fourth sale. Research has proven it is six to seven times more expensive to acquire a new customer than it is to keep one. No retailer wants to keep chasing new customers because it is too costly and hurts the bottom line.

So it isn't surprising that retailers want to lock you down as a customer – and preferably, a loyal one.

One of the quickest and easiest ways to do this is to gain online access to you. I've fallen for that many times and given out my email, only to find I was inundated with alerts of one-time offers, deep discounts or the special of the week. Lesson learned.

In today's environment, you need to be selective and look for ways to get the biggest bang for your retail buck. Many retailers today offer customer loyalty programs, which they say will bring you savings and rewards.

I like reward programs and I do selectively collect points that I will actually use. Sure, I've been disappointed when the rules change; but I can't do much about that. I can only change my response to the situation. That means in some cases I've ended the retail relationship, and in other cases I've searched out alternatives. Yet, most of the time I just grin and bear it.

Before you join a loyalty program here are a few considerations to be a little more "point savvy":

  1. Choose wisely: Rather than signing up for several rewards programs, it may be more beneficial to stick with one or two you'll use frequently.
  2. Understand the program's structure: Some retailers structure their programs so the heaviest spenders reap the greatest rewards. Determine if you will achieve a level where you will benefit.
  3. Figure out where you shop: Look over your credit card statements to get a sense of where your money is going. If your spending habits show you're already loyal to a particular store or brand, you could get the most from a membership there.
  4. Look for hurdles: Determine how much of a hassle it is to redeem your points. Will you realistically go to the effort to do it? Are there expiration dates on the points, meaning that the you have to use them time will be limited?
  5. Seek out red flags: Read the fine print and understand the parameters of the plan look for red flags. For example, when can you spend the points? Are there blackout periods? Are the points transferrable?

Finally, next time a cashier asks if you want to sign up for a loyalty program, think about whether you can really benefit from it. If not, the best thing you can do is politely decline. 

As the Chief Financial Commentator for CTV News, Pattie Lovett-Reid gives viewers an informed opinion of the Canadian financial climate. Follow her on Twitter @PattieCTV