According to new research more than half of all credit cards issued now include some kind of loyalty programme, which has become the main weapon in the battle for customers.
The Loyalty Report, commissioned by GM Card, a Vauxhall Motors company, says that this is due to the changing economic and social climate with suppliers realising they must offer tangible rewards to tempt the "footloose" customer to remain loyal.
Research among more than 700 consumers found that loyal shoppers tend to spend twice as much as freewheeling shoppers at their first-choice store. This is particularly true when it comes to grocery shopping where loyal shoppers spend up to four times as much.
But the report's author, Professor Steve Worthington, of Staffordshire University, found that increasing competition from supermarkets, petrol stations and airlines as well as traditional debit and credit cards has led customers to be more discerning about the programmes offered.
"Customers are actively looking for the best loyalty scheme to join," Professor Worthington said. "They are no longer passive recipients of schemes bolted onto other profits ... Rather, customers are now becoming more aware of their individual "value" to the competing suppliers of goods and services and they are consciously looking to be rewarded for their patronage."
For every pounds 3,000 spent customers now have a wide choice of rewards ranging from a free meal for two (American Express), pounds 30 off a British Gas bill (Goldfish) or pounds 120 off your mortgage (Bradford and Bingley Building Society).
Actual monetary value for every pounds 100 spent varies considerably, from pounds 4 at Bradford & Bingley to 20-25p on the TSB Trustcard. Most cards have a real rate of return on money spent of around 1 per cent although it can vary from 0.25 to 4 per cent. The three supermarket group loyalty cards - Tesco, Safeway and Sainsbury - all offer pounds 30 off a grocery bill for every pounds 3,000 spend.
The future of such programmes, Professor Worthington concludes, is the development of alliances between different kinds of companies. Shell "Smart" points can already be redeemed at John Menzies or converted into air miles and Tesco Clubcard points can be collected at B&Q stores.
However, the professor warns companies against complacency. A loyalty programme, no matter how attractive, is "not a panacea for a poorly run organisation", he said. "Consumers will no longer tolerate organisations which fail to respond to their needs."