Christmas morning is just hours away, and many of us are just putting out our cookies for Santa, or tying a bow on our last present to tuck under the tree. Looking at the gifts you purchased this year for your loved ones, how many of those were bought through loyalty reward programs such as Air Miles? It’s becoming big practice to purchase holiday gifts this way, says BMO’s Annual Holiday Spending Outlook report, which was recently published.
According to the report, the number of people who used loyalty rewards to buy their gifts was 20%, a rise of 6% from last year, when only 14% of us turned towards “hidden money” for gifts. The report not only questioned the number of people that did it, but what people thought about others that did it. Turns out, it’s not all that bad. 85% of survey respondents said they did not consider it “tacky” for a person to use loyalty rewards for gift-giving, with the majority of that 85% living in British Columbia. But those in B.C. are not the ones most likely to use the rewards, even if they’re okay with it. It’s those in Ontario who are most likely, with 25% saying that they would and/or have used loyalty rewards to buy gifts. And who wouldn’t consider it? Most likely Quebec, with only 14% saying they’d consider such a thing.
But it doesn’t look like it’s just our gifts we’re trying to save money on, but our travel expenses too. Air Miles collectors especially, like to tap into these reward programs to save themselves on flights, either to go home and visit family or to get away to a tropical destination during our harsh winter months. In fact, the report also showed that the top five destinations for flights purchased with Air Miles are: Mexico, Cuba, Dominican Republic, Jamaica, and the Bahamas. And why not? Once you’ve saved up enough at the grocery store, it makes a lot more sense to use your Air Miles than your secured line of credit to pay for that getaway.
So while using loyalty rewards to make purchases, some of them even major, might save our HELOC and help us with our own personal situation, what about bigger picture? Does less cash going into the economy, at a time when it’s already quite fragile, a dangerous situation?
Not at all. In fact, while Canadians might be “saving” money by using loyalty rewards to buy gifts, they’re not really saving anything at all. 26% of those surveyed said that they use the money not spent on gifts, to buy more gifts! Retailers don’t suffer, the economy remains stable, and loyalty rewards are not the end of everything.
Retailers didn’t really have too much to worry about anyway, though. In November when Canadians were polled they said they planned to spend about $700 on Christmas presents this year. Now that we sit, on the eve before Christmas, numbers have been collected to find that we actually spent an average of $1,397. Something that should definitely have sugarplums dancing in retailers’ heads!”
