Restaurant loyalty schemes: do you really save?

Sam Jackson

May 28, 2014

November 13, 2018

Restaurant loyalty schemes: do you really save?

Getting something for nothing is the holy grail for any consumer on a budget, but savvy stores and restaurants are well aware of our eye for bargains and gladly offer glossy schemes to make sure we're really spending more.

What are loyalty cards and rewards schemes?

On one level, the answer is obvious: they reward the money you spend on food with some free food. On another level, the language is incredibly leading. Words like loyalty and reward are deliberately chosen to make you, the customer, feel like the restaurant recognises and values you for being their friend, and coming back time and time again.

In actual fact, they are trying to make you come back without rationally assessing their quality and prices against competitors, or searching for lucrative deals elsewhere. If you are blindly returning, assuming that the reward scheme is giving you value, then they've got you where they want you: and it's time to step back and do the maths.

Does loyalty really pay?

Loyalty never pays, because loyalty assumes unwavering faith on the part of the consumer. And here at Money Dashboard, we're all about objective evidence. So, to see how much you save with loyalty schemes, let's take a look at a few:

  • Beefeater Grill Reward Club gives diners five points per £1 spent, and 500 points gives a £5 voucher. So that's £5 per £100 spent, or, a discount of 5%
  • The Handmade Burger Co. offers a free drink after three stamps (burgers), a side after six, and a burger after 10. At best, that's a 10% discount
  • Nandos cards, which award a chilli for each half chicken (or equivalent in price - £7), with the total redeemable for quarter, whole or half chickens. These represent 20%, 16% and 17.8% savings respectively

So the amount customers actually save can vary wildly from not very much to an attractive amount by most standards. But the key thing to remember is that in order to access these discounts, customers are sacrificing their choice. It's just about deciding whether it's worth it.

The antithesis of the loyalty scheme is deep discounting. This means offering special deals, or using sites like GroupOn, Wowcher and lastminute.com. These are usually more limited in scope, but can deliver savings as high as 75% of your meal cost and, crucially, can be rationally compared and assessed for value: unlike loyalty schemes, which demand repeat visits.

But aren't there other benefits?

Some reward schemes involve signing up to newsletters, sometimes as an additional feature of loyalty card schemes, like at the Beefeater Grill, sometimes independently, like the My Pizza Express system. Both can be lucrative if used properly, since they are essentially discounts with limited clients, but the discounts come at the expense of being tempted back. It's usually far more sensible to assess your dinner options when you're ready to dine out, rather than eating when they suggest you do so.

If you're struggling to assess the benefits and damages from your dining habits, try using our free Money Dashboard budgeting software to track your spend. You can highlight your outgoings on dining each month, and break it down by restaurant, to see how much you really gain by sticking or switching.

 

Posted by Money Dashboard

 

Sam Jackson

Money Dashboard

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