The Allure of Loyalty Bonuses

Loyalty programs promise rewards for continued patronage, often presented as 'bonus points' or 'extra modules' of service. However, savvy consumers must look past the glossy marketing.

Devaluation Risk

The primary risk with bonus points is devaluation. A company can unilaterally decide that 100 points are now worth 10% less tomorrow. This hidden cost erodes the value of your accumulated bonuses.

Calculating True Redemption Value

To find the true value, divide the cost of the item you want to purchase by the number of points required. Compare this rate to what you would pay in cash. If the cash price offers significantly better value, the bonus point system might be a liability.

When Bonuses Pay Off

Bonuses are best utilized when they unlock access to an otherwise inaccessible tier or feature set (an 'Exclusive Module'). If the bonus allows you to skip a long waiting period or access premium content, it offers tangible, non-monetary value.