The hidden cost of chasing loyalty rewards

South Africans love a loyalty programme. From grocery discounts and fuel rewards to points, vouchers and cashback, many consumers now belong to more than 10 different programmes.

But are those rewards genuinely helping us save — or simply encouraging us to spend more?

Speaking to Jeremy Maggs on HOT Business, Erica Liebenberg from personal finance platform JustMoney said loyalty programmes can deliver real value, provided consumers use them carefully.

South Africans are saving tens of billions of rand through rewards every year, she explained. The problem starts when we change our spending habits simply to earn more points.

“If they’re not saving us money in real terms, then they’re not serving us well at all.”

Are your loyalty rewards really saving you money? Listen to Jeremy Maggs’ full conversation with Erica Liebenberg as they unpack the real value — and potential pitfalls — of loyalty programmes.

Liebenberg’s advice is simple: choose loyalty programmes that match the way you already shop. If you regularly buy groceries from a particular retailer or fill up at a certain fuel station, rewards linked to those everyday expenses can make sense.

The danger comes when a special offer convinces you to buy something you never intended to purchase in the first place.

“If you’re spending just to accrue rewards… then you’re working for the rewards programme. It’s not working for you.”

There is another cost consumers should consider too: personal data. Loyalty programmes give retailers valuable information about how, where and what customers buy.

Liebenberg said consumers should think carefully about which programmes they join and how much information they are willing to share.

“We are definitely paying for it with our personal information.”

She also recommends treating loyalty rewards as part of the household budget rather than “free money”. Cashback, vouchers or points could be used towards groceries, school expenses or other planned costs instead of an unplanned splurge.

And don’t forget to check those balances. Points can expire and programme rules can change, so reviewing your rewards every few months could prevent valuable savings from disappearing.

The bottom line? Loyalty programmes can work — but only when the rewards work for you, rather than the other way around.