Shrink Ray Now Hitting Rewards Programs

We’ve seen food items, airline mile programs, and credit card limits all shrink as the economy worsens. Now it’s time for other rewards programs to become just a little less rewarding—and somewhat sneakily, too, in these two stories recently sent in by readers.



Thank You Network

(Citibank)

Citibank put a lot of marketing money into convincing customers that its “Thank You Network” was all hugs and sunshine, but it turns out it’s the same as any other program backed by a credit card company. Their fixed-point flight redemption offer is going away on March 1st, and earlier this month Adam discovered that they’ve already lowered the cap from $4200 to $2800, although there was no mention of this change on their website when he logged in to redeem his points. The fine print says they can change terms at any time without notice, and apparently they have, too bad for you if you’ve been saving up points for the past couple of years.

Citibank’s “ThankYou” network (www.thankyou.com) has offered a fixed-point flight redemption offer for a while. 140,000 points, for instance, has netted a roundtrip business class flight valued up to $4200 between the continental U.S. and Hawaii.

Apparently, on March 1st, the ThankYou network will no longer offer fixed flight redemptions. I learned of this only second-hand, from a forum on the web (FlyerTalk). I never received ANY notice from Citibank, and in fact, when I called to confirm the rumor by calling Citibank (the # listed on my credit card), I was told that it was untrue and that nothing was changing.

But here’s the more frustrating clincher. When I called to book a flight yesterday, I was on hold for over an hour (!) and the agent refused to book the flight, saying the cap had been changed from $4200 to $2800. I explained that I had not heard of this, and that the site still showed $4200. No dice. Talked to two managers, but they refused to honor the listed price cap.

I was told that:

- Citibank deemed that it no longer wished to honor the earlier offer as of this past Monday.
- Citibank maintained the right to change its redemption levels at any time, for any reason, and without notification.

Home Depot Rewards

(Mastercard)

Home Depot has also decided to reduce the value of your points, only they’re taking a more Target-style approach. Jason noticed that not only will he need to redeem more points for gift cards than he used to, but that the value of his points drops if he opts for larger card values. Translation: it’s “cheaper” to order two $25 gift cards than one $50 gift card.

I recently logged into my Home Depot rewards card to find that I have 12,000 + “reward” points to spend. In the past I would trade 10,000 points for a $100 Home Depot gift card. Recently, they decided to revamp the rewards system— now the $100 gift card “costs” 12,000 points. But that’s not the point- check out the rest of the choices:






3,500 points for a $25 gift card (140 points/$)
8,000 points for a $50 gift card (160 points/$)

HUH? Is that $50 gift card somehow “special”? Perhaps it’s a “convenience charge” ala Ticketmaster. “Only one card to keep track of!” That’s worth at least 1000 points!

Even better,

55,000 points for a $600 gift card (91 points/$)
125,000 points for a $1250 gift card (100 points/$)

Are they just betting on the idiocy of their customers? I guess so…

Comments

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  1. Meathamper says:

    Rewards programs never work, unless you have patience (which nobody would bother with anyway). I remember trying to sign up for a Visa card to get a Dell laptop, and I had to wade through one zillion pieces of paperwork and waiting years. I never got the laptop.

    Frequent-flyer rewards are different, in that you get your rewards right-fucking-now. I don’t need to wait ages to get a free flight to Europe. I show my card at the counter, and get a ticket.

    • Corporate_guy says:

      @Addicted To Chocohol: They work great. I have a visa card that allows me to redeem points directly for cash(although who knows if that is changing now). I got 70 bucks last year. Amex has a blue cash that automatically just credits money back to you at the end of the year. I got 150 from that. I have never once made an interest payment. That is 220 dollars in free cash for doing nothing.

      • johnva says:

        @Corporate_guy: Agreed. I made $450 in credit card cashback last year, also without ever paying a penny in interest or fees. That is a good chunk of free money for doing nothing. Credit card rewards work great, but you have to carefully shop for the best cards for your particular spending patterns. Some of us actually have a modicum of patience.

    • scootinger says:

      @Addicted To Chocohol: I’ve had nothing but good experiences with the CC rewards programs I’ve used (Citi, HSBC, Chase).

    • FLConsumer says:

      @Addicted To Chocohol: I totally disagree! Travel rewards often give the best payback %, but even some cash-back cards are worthwhile. With any of these rewards programs it pays to spend wisely (do your homework).

      Averaging out all of my purchases and rewards, I’m running approx 3-4% back. Not bad in my book.

      • Murph1908 says:

        @FLConsumer:
        I have a gas station branded Visa. I get 5% back for gas purchased there, 2% for food, hotels, and entertainment, and 1% on everything else. I use it every chance I get (and pay it off completely online about 6 times a month). I get $25 gas cards about every other month.

        • Brunette Bookworm says:

          @Murph1908: I have a Speedway Mastercard and get extra points for using it for their gas, PLUS $0.05 off the price per gallon, or any other purchases there. I get points for purchases at other places, too. I just traded some point in for a $25 GameStop card so I could the DVD remote for my PS3. It just depends on what you want from a card and how you use it.

    • JustThatGuy3 says:

      @Addicted To Chocohol:

      Um, it usually takes time to earn frequent flier miles – I don’t know what you mean about just “showing your card at the counter.”

      Personally, I like my cash back card – 2% back (in cash, at the end of the month) on every dollar I spend, everywhere. BTW, I want to thank all the folks paying cash for subsidizing the merchants and making my rewards possible.

    • Traveshamockery says:

      @Addicted To Chocohol:

      $400 (to date, 3 months to go) cashback on AMEX Blue Cash.
      $500 in GCs helped buy my new A/V receiver
      $160 in GCs about to be redeemed any day now.

      Yeah, this crap doesn’t work.

    • Miguel Valdespino says:

      @Addicted To Chocohol: They’ve improved my Chase Amazon Visa. Now I can get my rewards in $25 amazon gift certificates or $50 checks or several other options. Since I get 3% back on Amazon purchases, it make sense to get the checks.

  2. savdavid says:

    This reminds me when I used to be part of MyPoints.com, a site where you got points for visiting other sites. You could exchange the points for other tangible things. I noticed though as I collected points and time went on the number of points they awarded went down at times and the amount of points needed to get anything went UP! Double whammy. Rotten site.

    • Trick says:

      @savdavid:

      I’ve been with MyPoints 08/1999 and have earned over 213000 points and I agree with you, it is harder and harder to earn points and then redeem them…

  3. metsarethe... says:

    I frequently (read As soon as I hit the level) cash in my points on my cc, in my case its 10,000 pts for $100 bucks. It’s my way of guarding against these changes, to the extent that you can gurad yourself.

  4. humphrmi says:

    There are only two reward programs that have ever worked for me, the rest required too many hoops for me to jump through to make it worth my while:

    - Direct cash back credit cards
    - Airline miles

    Even those aren’t perfect, but better than these retail rewards programs IMHO.

  5. Roy Hobbs says:

    Costco American Express Card. I run everything through it, and just today received my $700 rebate check. I always pay on time, and never paid a dime of interest.

    I may build a wall out of the cases of Diet Pepsi I buy.

  6. missdona says:

    I just cashed out my WorldPoints from BofA, got a $500 check.

    I do airline miles, and even if they don’t amount to much after a year, I can usually get an extension to my subscription to Entertainment Weekly. I’m an AA platinum member, it lets me check bags without fees and short-cut lines (check-in, security and boarding). Even if I never cash in my miles, that stuff is so worth it.

    Same with Hilton Diamond, I always get upgraded and free breakfast. Totally worth it to me.

  7. bologna_wallet says:

    Funny this should come out now. I just received a letter from the Thank You Network advising of changes to the program. One of them, which is fairly significant was buried in the middle of list, probably in an attempt to hide it. But the bonus points that they reward for supermarkets and gas stations seems to be going away, based on my intrepration.

    • Steven Urich says:

      @bologna_wallet: We got a Citibank credit card a few years ago because of the extra points for gas and groceries. We used to get 5 points for each dollar spent on those two categories. For cash flow reasons (we were using the card too much) we stopped using it except for a couple things each month. A few months ago, I noticed we weren’t getting any bonus points and it looks like they took all the bonus points away.

      Because of that, I wait until we get to 10,000 points and trade them in on a gift card. We just got one for Chili’s today. It’s the best deal on points in the program.

      • AbsoluteIrrelevance says:

        @Steven Urich: I also never get less than $100 gift cards on ThankYou, unless it is student loan checks because they have the same conversion rate (1000 pts = $10).

        I didn’t know that about the grocery store points. Now I’ll definitely keep my college Citi card. That one doesn’t have a promotional time period for bonus points.

  8. pb5000 says:

    My bank has been offering points for using your debit card, which has been great because I use my debit card all the damn time. So far I’ve cashed them in for $250 in gift cards which went to stores I basically would have spent the money at anyway. Worked for me but now the bank has been purchased by PNC so I’m wondering when they’ll start to disappear.

  9. ReadLine says:

    I think the Thank You network is still pretty fantastic. It has the most range of any rewards program I’ve ever seen, and even without the fixed point flight option, you can still use your points for hotels and flights on Expedia.

    I have a Citi credit card that gives me 3 points per dollar and 5 points at grocery stores, drug stores, and gas stations. With the fixed point flight option, I was earning a free flight every 4 months, and it essentially amounted to getting 6% back on my spending (since only 20,000 points were needed for a $400 flight). I’m not going to complain that they’re cutting back a little. It costs me nothing to earn these points and there’s so many ways to spend them.

  10. tange1 says:

    I made 600 bucks off a credit card reward program without ever carrying a balance on the any cards. It can be done if you are diligent.

  11. Corporate-Shill says:

    Rewards are getting tighter, but the merchants are paying higher fees. Sounds like the middle-man is making a few too many extra bucks.

  12. 67alecto says:

    I have the Thank You Rewards on my citi card. They have been cutting back on the $100 cards for well over a year (I used to alternate between Target, Circuit City, and Home Depot).

    I sent them an email about it and they never responded. I was able to redeem for $100 Amazon certificates last November, but those have now disappeared as well.

    The next thing to disappear will be me as a card holder!

  13. vastrightwing says:

    Never had any luck with “rewards”. The only one that’s rewarded is the credit card company.

  14. Ragman says:

    I was disappointed a few years back when Discover stopped offering the $40 gift cards for Borders and Red Lobster at $20(in cashback bucks) each. Now the Borders is $25 for $20, and the Red Lobster is $45 for $40.

    Still worth the effort, though.

  15. Blueskylaw says:

    I hate with a passion all these rewards programs that companies come up with. Everything is stacked in their favor, terms are changed at their whim. Just as you are about to reach for that banana on the stick, they pull the stick back (Coke points anyone)?

    The only one I ever cared about was the Discover cash back. It is plain and it is boring but it slowly builds up. Also every now and then they offer 5% back on purchases like gas and airline tickets for a limited time period.

  16. H3ion says:

    For a couple of reward programs that seem to work…

    1. American Express. I’ve been saving points for years. You can redeem them for merchandise at inflated prices but you can also transfer them to various airlines and hotel programs so if you need an extra few thousand points for a hotel stay, you simply call American Express and transfer the points.

    2. Amazon. This is now a Chase branded card but it was pretty simple. For every $2500 spent you got a $25 gift card on Amazon. Since I use Amazon a lot, it’s come in fairly useful.

    • SScorpio says:

      @Barrister76:

      I’ve also been happy with my Amazon Chase Visa. I especially like their new category bonuses that works like Discover where you get extra points for a certain category for a certain period of time.

      Over the Holidays from Mid Octoberish to the end of the year it was 5% on gas purchases rather than the standard 1% on everything that was non-Amazon.

      From January 15th to the end of March it’s 10% on pretty much all of my monthly bills, utilities, cable, cellphone, auto/home insurance are all included. I switched alot of the auto bill pays from my Citi card to my Chase to take part in the promotion, but it looks like I’ll be falling into Chase’s trap and leaving them on my Chase card rather than dealing with Citi’s increasing poor rewards plan.

    • HogwartsAlum says:

      @Barrister76:

      B-b-but…AMEX is turning evil!!!!!!!! ;)

      That Amazon thing sounds good. I buy off Amazon all the freaking time. Maybe I should look into that. Is there info on that on their site?

  17. runchadrun says:

    My credit union’s MasterCard lets you redeem points for airline tickets, among other things. You can redeem your points in one of two ways: you can search for a restricted ticket which you’ll get for free (it’s 30,000 points for a domestic ticket) or if you can’t find one of those restricted tickets you can spend the points for dollars off of any ticket on any airline. 45,000 points gets you a $525 credit. Since there’s no annual fee, a ridiculously low APR (7.24%), we don’t carry a balance, and we’re not supporting a bank that’s taking handouts from the taxpayers, this works out quite well for us.

    That being said, they just upped the miles for a free domestic ticket from 25,000 to 30,000 saying that they are just keeping in line with what the airlines are doing with their FF redemption levels.

  18. fratgirl says:

    I shall cry if the the Sephora $100 cards go away D:

  19. craiggers says:

    Just today I got a notice in the mail from Chase telling me that my Hess rewards card was now “3% rewards on all Hess purchases and 1% on all other purchases!”

    Except that for the 3 1/2 years I’ve had the card it’s been 5% on Hess.

    Boo.

  20. battra92 says:

    Funny, my went up actually. I have an Amazon Visa and it went from 3 pts for Amazon and 1 pt for everything else to 3 pts for Amazon, 2 for dining and gas and 1 for everything else. I can also save up 5000 points for $50 instead of just automatically getting a $25 gift certificate to Amazon every 2500 points.

    My rewards card bought my Kitchenaid. :)

  21. Samets says:

    I use my Pentagon Federal CU Visa for everything. The rewards are given back as credit at the end of the month. It’s not as nice as getting a $500 check but it’s real money deducted from the actual credit card bill…

  22. Cubziz says:

    Watch out on the Home Depot $25*2 versus $50. I had the same thing happen with Am Ex, but if you read the fine print, you can’t use the cards together. Only one per purchase.

    So if you wanted a $50 item, you’ll be paying for it.

    And yes, always read the fine print.

  23. NessaArachne says:

    Do you have to pay taxes on the money you get back from reward credit cards? Why or why not?

    Also, I like the amazon.com cc rewards. They mail me a gift cert every time I spend 2500 or so.

  24. theblackdog says:

    I discovered the other night I have lots of points to burn on my credit card, hello $100 account credit.

  25. AustinTXProgrammer says:

    Cash rewards… Points are BS

  26. Nick1693 says:

    Dale and Thomas popcorn is getting rid of their rewards program.

  27. theslik1 says:

    I use a Citi CashReturns card for almost all of my purchases, having switched to cash rewards about a year ago when Thank You Network energized their shrink ray. $400+ bucks a year for making normal purchases and paying monthly bills is ok in my book.

    To those who say reward cards don’t/can’t work, here is the simple answer: treat it like a debit card, account for every expenditure in your checkbook, and pay it off monthly.

  28. Starfury says:

    I’ve found the best reward plan is the Amazon card (even though it’s from Chase.) You get 1 pt per $ spent at 2500 points they mail you a $25 Amazon gift card. If you buy on Amazon you get 3x points. My wife’s Amex/Costco card is pretty good too. We used to use our Discover card but it has a sliding scale on the rewards; you don’t really get much back until you start spending a LOT of money each year.

  29. Anonymous says:

    I have a Citibank card that uses the Thank You program, which is a little annoying but not worth getting a new card over. Since I also bank with Citi, I get points for that as well.

    I don’t travel very much so for me, the best use of my Thank You points is to pay down my student loan. You get a slightly better point-to-cash conversion than with the GCs or merchandise (10,000 points=$100). They just mail you a check made out to your lender and you mail it in. I got $500 toward my loan this year– it’s the equivalent of an extra 2 payments for me, so not chicken feed. Plus that way I don’t end up with tiny amounts on GCs moldering in a drawer or buying stuff I don’t really need just because I have a GC.

  30. cowholio4 says:

    Better yet…use mint’s calculator

    [www.mint.com]

    I use Thank You points… but after this change I might leave. I got my 1200 towards student loans so I won’t complain :)