Go-between websites offer to ease the season's burden
Internet loyalty schemes offer greater protection to shoppers seeking cash rewards for buying from household name sites. Kate Hughes reports
Sunday 02 December 2007
With consumers set to spend an estimated 5bn online this Christmas, retailers offering to pay a bonus for shopping with them could be a useful way to lighten the strain on your wallet.
In the past few years a number of sites have sprung up offering to pay a bonus to shoppers buying through them. In effect these "loyalty scheme sites" act as a go-between for established high street and internet names such as Marks & Spencer, Littlewoods and Amazon.
The big three players in this growing field are RPoints.com, MutualPoints.com, and GreasyPalm.com, between them they boast some two million members. They claim that shoppers can enjoy substantial savings in loyalty bonuses paid in the form of cashback, points earned which can be put towards goods or software.
Siri Andersen, a spokeswoman for MutualPoints, said that consumers buying electrical equipment through some of the site's retail partners, could earn up to 100 for every 1,000 spent, but this seems to be quite an extreme example, buy a 180 digital camera from Littlewoods and you will receive the points equivalent of 5. The bonus is paid by cheque sent to the shopper a couple of weeks after the purchase is made.
In return for the rewards you are asked to disclose personal information, which the sites keep confidential but in addition, your spending habits will be monitored and the data sold on.
Loyalty scheme sites also offer rewards for any financial products sold such as private medical insurance, current accounts or credit cards.
In line with the growth of such sites the big three last week launched the Loyalty Scheme Association (LSA) to regulate the payment of rewards and to ensure that customers details are protected. Richard Yendall, chief executive officer of RPoints says the LSA will offer peace of mind to shoppers: "Customers have to know that they are dealing with reliable sites."
To this end, the LSA has drawn up a code of conduct covering the prompt payment of cashback and other rewards as well as the protection of users' data. In addition, minimum standards of complaint handling have been set down: "Sites should at least have a postal address and preferably a telephone number," Mr Yendall says. However, there are well over 200 loyalty schemes and at present only three members of the LSA.
As for whether the schemes offer a worthwhile deal, some, even involved in the industry, have their doubts: "Even if you are spending 1,000 a year online, the average shopper does not make enough to make these loyalty schemes pay (in terms of time and effort)," Stuart Evans, the UK manager of ICLP, a marketing agency with loyalty schemes as clients, says. But Mr Evans adds that shoppers should look to use both online and offline loyalty schemes such as Nectar if they want to make the most of their shopping.
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