Raking in the Rewards


Do you ever hear stories about people who use rewards programs to save extra money, then have a hard time believing they were really able to save that much? You and me both. Then one day I saw a Facebook post from a good friend of mine who said she was able to save more than $4,000 in the past year using rewards and coupons. In other words, she saved 46% off her total year’s spending goals!

I’ll admit it, that had me intrigued. I immediately reached out to her and begged her to tell me how she did it. Interested in finding out? Read on for some great tips from my friend and budgeter extraordinaire, Elizabeth Rauf. These tips will focus on how she did it with rewards – then we’ll check back in to share how she did it with coupons.

What is a Rewards Program?

First off, let’s take a minute to discuss what a rewards program is. Store rewards programs – also known as loyalty programs – offer you incentive to continue shopping at that particular store through discounts and prizes. This can take on many forms. Some retailers like CVS and Walgreens will give you a loyalty card for free. Other loyalty cards come at a premium but promise to pay off in dividends later (Amazon Prime is an online example of this). Finally, there are special retail credit cards that offer discounts every time you buy and pay with that card.

So what’s the point? The store wants you to remain loyal to them, of course! Aside from that, this also gives you more incentive to spend when you wouldn’t otherwise. While these programs can be a slippery slope for your budget, done right they can save you a boatload of money.

How to Maximize Your Rewards Programs

Signing up for a rewards program is generally quite easy…it’s maximizing them that takes a little bit of effort. According to Elizabeth, the key to making these programs work for you is to: 1) have a deep understanding of the program and 2) remember to use the program.

Understanding Your Rewards Programs

Let’s start with understanding the program. This is especially important if you’re signing up for a rewards program that costs money. Compare the price of the program with the amount you could save by using it. Elizabeth breaks this down, using book buying as an example:

“Barnes and Noble, for example, has a membership you can buy for $25/year. You get percentages off books and free shipping. And if you regularly buy new books from that store, it might be worth it, especially with the free shipping. But if you prefer to buy used books on Amazon or at your local Friends of the Library sale, $25 is too much.”

The next aspect of understanding your rewards program is knowing what you get and when it expires. According to Elizabeth, Kohl’s rewards points expire one year after they’re earned, MyCokeRewards expire three months after an account has been inactive, and Delta Skymiles never expire (although Elizabeth used to work at Delta and learned the rewards can expire after three years of account inactivity). If you have rewards that have already expired, all hope may not be lost. Some stores have a loose policy on what “inactive” means, such as the Delta example mentioned above. To play it safe if you are thinking of signing up for a rewards program, evaluate when things do expire and whether or not you’re likely to use the rewards in that amount of time.

So which rewards programs are the best? Elizabeth’s answer: any rewards program that allows you to continually earn rewards. That way you can ensure you’re gaining (and keeping) rewards over a reasonable amount of time and that you don’t have to overspend to take advantage of the rewards.

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Remembering to Use Your Rewards Programs

What’s worse than spending money on a rewards program that doesn’t make your money back and then some? Spending money on a rewards program and forgetting to use it! Unfortunately, this can be easy to do.

One way to remember is plan ahead. Before you head out to a restaurant, shopping trip, or social function, double check to see if you have a corresponding rewards card and grab it before you go. Another option is to have these cards in your wallet at all times and/or to register with your phone number so the retailers can find you easily in their system.

Remembering to use your rewards programs isn’t just about remembering to bring your card. There are many ways you can get rewards that aren’t obvious. Elizabeth explains how she managed to earn travel rewards without stepping foot on a plane last year:

“You can earn airline miles by flying, but did you know you can also earn them by eating out? Delta, United and American all participate in a dining program in which you sign up, register as many credit or debit cards are you want, and then eat at participating restaurants. Once you’ve dined, they send you an email to fill out a 30-second survey, and you’re finished…I earned Skymiles last year without flying. And since Delta’s definition of ‘account activity’ is any time miles are earned or used, this keeps my Skymiles account active.”

So how can you find out what exactly will earn you rewards? Visit the retailer’s rewards page online frequently. New partners could pop up at any time!

Utilizing Rewards Programs to Boost Your Budget

As you can see, rewards programs are often flexible. And that flexibility allows you to earn rewards for following your already planned out budget. But to make sure these rewards are boosting your budget (not just giving you more stuff) you’ll want to be extra strategic. Don’t just strategize on how your current spending could earn your rewards. Optimize for the rewards that will prevent you from spending on already planned future expenses. That’s how you can ensure that using rewards programs will truly save you money when all is said and done.

For example, Elizabeth explains that BP and Shell let you earn points that save you money on future gas purchases. Pretty great, right? Well, Speedway lets you do that – but also gives you a chance to redeem points for food, drinks, and gift cards. Which one would be more beneficial to your budget? (The answer could still be the first two if you’d rather focus your points on gas alone – that’s where being strategic really comes into play.)

Once you understand your strategy, then you’re ready for the final step – stacking. This is how Elizabeth was able to save more than $4,000 in one year! Here’s an example of how she did it:

“Let’s say I need to buy ink. I have a Staples Rewards card that gives me free shipping, as well as a percentage back later. So where do I start? I start at ebates.com, because they will give me 2 percent cash back on Staples purchases. From ebates.com, I follow their link to Staples.com, where I buy my ink. My rewards program gives me the free shipping and I’ve earned a percentage toward my next reward. I paid with my bank credit card, so I’m earning 1 percent cash back through them. I also registered that credit card with Plink, so I’m earning points toward gift cards there, too. So I saved money (shipping) with the store loyalty program and earned cash and points with four other programs, all on one transaction.”

Now that’s what I call some serious rewards program skill! Remember, when it comes to rewards programs, you want to start slow and then strategize. When you get comfortable with the system, you could find more ways to save than you might ever have imagined before. Apply that savings to your debt payoff plan and financial freedom will be just around the corner!

Don’t forget to stay tuned for our next post from Elizabeth to find out how coupons played a part in her huge savings!

Image credit: evgenyb

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  • CynicFan2

    You have to switch your thinking about Rewards programs. They don’t put a single dollar in your savings account. All they do is reduce the price to a point where you are enticed to purchase something that otherwise you’d walk away from because it is too expensive. Like most, I find myself buying more from Amazon because of my Prime membership than I would if I had to pay shipping. I am loyal to certain airlines because I tote their credit card and will often justify paying more to get the points. Rewards are valuable if they are nothing more than a bonus on something that you would otherwise purchase, but they are insidious because they convince us to spend money because of the rewards. Its Pavlovian.

    • Shoona

      I was thinking the exact same thing! They can be “rewarding”, but only if you were going to spend the money in the first place. Becareful not to overspend just because it’s “going to be” a good deal on your rewards. 🙂

      • Shannon_ReadyForZero

        You both are absolutely right – rewards can lead to overspending if you’re not careful. However, if you are diligent with your budget and don’t spend outside of planned purchases, then you’ll stand to save a lot by using rewards to purchase items or experiences that were already part of your plan. The key is to stick to your plan, avoid impulse buying, and view rewards as a way to save money and not buy more.

  • Joseph

    Plink is a good suggestion from the article, as I had never heard of the service. The last free cashback rewards program I used (Envaulted) went belly up and cost me about $50 in promised rewards payout.

    I understand the point of Cynic and Shoona that you can end up paying more (by purchasing more) when tempted by a rewards/cashback program. But the point Shannon (via Elizabeth) was trying to make is to utilize all rewards programs available if you need to make planned purchases.

    My wife and I have a variety of no-cost rewards programs that cover most – if not all – online retailers. Between ShopDiscover, Upromise, Corporate Shopping and a health/wellness-based cashback program, we’ve been able to combine program cashback with credit card cashback to earn anywhere from 2%-16%, depending on the vendor. Our recent purchases from Apple, Container Store, Overstock, Groupon, Home Depot, etc. were all planned and researched, rather than instinctive.

    We view targeted rewards programs like Plink as a bonus; if we are going to make a purchase from a promoted retailer anyways, why not get something back in return. I don’t think either of us have ever been pressured into wasteless spending from the promise of future rewards.

    • Shannon_ReadyForZero

      Joseph, this is the perfect example of how to use rewards programs in a way that won’t be detrimental to your finances. Choosing cash back rewards can be especially helpful since you can determine what to use the extra money for. While some rewards programs can bring with them temptation to buy more, it looks like you two found the ones that will prevent you from feeling that way.