Parents should ensure students are not using excess loans to go shopping and out with friends.

How Smart Shoppers Use Rewards Programs

These tips will help you leverage retailers' points systems. 

Parents should ensure students are not using excess loans to go shopping and out with friends.

If you're shopping, make sure you're benefiting from loyalty programs.

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Everyone loves to be rewarded. A bump in pay at work for a job well done. A night out with friends after a long day with the kids. Rewards keep people motivated and coming back for more. The top retailers understand this, and that’s why a robust rewards and loyalty program can be a frugal shopper’s best friend. If you’re not taking advantage of them, then you’re essentially tossing away free cash.

When it comes to saving money, most shoppers reflexively drift towards the old standbys: keeping an eye out for sales, clipping or printing coupons, and scouring the net for online discounts and promotional codes once they hit the digital shopping cart. These are all tried and true methods that will indeed help you spend less, but they can also take a lot of effort on your part. A great rewards program, though, requires only that you go shopping at your favorite store to reap the benefits.

Here are four tips to keep in mind when you’re using rewards programs:

1. Don’t wait to join if you’re a frequent shopper.

There are many reasons a consumer might avoid joining a rewards program – the hassle of signing up and getting another card for an already overflowing wallet, not to mention the deluge of promotional emails clogging up your inbox. These are all valid concerns, but the most important question to ask yourself is, “Do I shop enough at this store to make it worth it?” If the answer is, “No”, kindly decline the check out clerk’s offer, pay up and hit the road. If it’s, “Yes,” fill out the application and join the program

Take me for example. I’m addicted to electronics – basically I swarm to any grown-man toys I can get my hands on. As a result, I’ve spent an ungodly amount of money at Best Buy over the past 15 years. For a while, I automatically responded in the negative when asked if I was My Best Buy member. Then one day I actually looked at the features of the program: $5 vouchers for each $250 spent, early access to special sales, free shipping with online orders. This may sound a bit paltry on paper, but considering how much I was spending – mostly on big ticket items where the points rack up fast - not joining was just foolish. I’ve probably saved well over $1,000 at Best Buy through the rewards program since then and am now an “Elite Plus” member with even better perks.

2. Pay attention to benefits.

Not all rewards programs are created equal. The best ones have no fees for joining, a low ratio of dollar spent to rewards, a mix of monetary rewards plus special privileges and exemplary customer service. If you’re looking at a program that’s missing some of those features, then consider skipping it.

3. Beware programs that don’t pay off.

Just because something calls itself a rewards program doesn’t make it so. Grocery store programs are a particularly galling example. Many offer you discounted prices on everything in the store provided you are a member (those who don’t have one pay more for the same items), but what they don’t tell you is their prices have been marked up so high to begin with that your “discount” is basically full price at other stores.

Punch card reward programs are also typically not worth it. If I have to buy 20 sandwiches at $6 a pop to earn one free, spending $120 on food to only get back $6 isn’t too enticing. And without my name in some sort of system to electronically track it, should I lose the flimsy punch card I’m back to square one. I’m better off making a sub at home.

4. Watch out for these red flags.

The worst rewards programs typically come with these not-so-great features: annual membership fees, overcomplicated terms and conditions, rewards points that don’t apply to all products or services, a high ratio of dollars spent to rewards and rotten customer service.

The bottom line is that if you find yourself frequenting a specific store that has a rewards program you haven’t yet joined, you’re wasting money. Do yourself a favor. Sign up and save.