Category Archives: Blog

The Cost Of Loyalty Programs (Part II)

I wanted to finish up our look at loyalty programs from two weeks ago.

All the details on a flight to Victoria are posted here – just scroll back to the last story in full. It’s a flight I’m on today, so it’s all broken down. If you’re hooked on the loyalty program of one of the airlines, you need to pay attention: On this $200 flight example, you have to pay EXTRA to get loyalty points. With Air Canada it’s an extra $23 to get half your miles or $44 more for 100%. With Westjet, pay $160 for the flight or $23 more for their Westjet dollars.

But look at their program: Westjet gives you 0.5% of your qualified spending in reward bucks. That’s one half of one percent! You’re paying $23 extra to get less than $1 in rewards. Yes, spend $23 to earn a buck! Tell me how that gets you ahead?

The other great example is from 7-11 and their new reward program. They’ve been doing a lot of TV ads, especially on CFL games. One of the ads is an offer to get a free small bottle of Coke for 1500 reward points.

OK, stop. I went to the store to check it out: The small Coke is 99 cents at 7-11, and pretty much every other retailer. So one dollar divided by 1500 reward points is 0.0007 cents. 7-11 rewards you shopping at less than ideal prices with seven one hundredth of a dollar. That’s to redeem your points. Flip it around to see what you earn: If it’s 2 AM and they’re close and open – buy what you need at 7-11. They’re convenient, good service, and open. But make sure what you’re buying isn’t costing you more than somewhere else because that seven one hundredth of a dollar isn’t making up for overpaying in the retail price!

Petro Points are $0.001 and Airmiles average $0.121. At most you’ll earn 1.5%. That’s the Westjet MasterCard, Aeroplan card, Costco MasterCard and others. It can also be as low as seven one hundredth of a dollar. Breaking news: I have NEVER had a millionaire tell me that their success was because of loyalty points!

Need I say more?

50 Years of ATM and My NFL Financial Hero

Happy 50th birthday to the ATM machine! It was September 2nd, 1969 that Chemical Bank opened the first ATM in New York city. It wasn’t very sophisticated, but just spit out a few 20 dollar bills – but it started the automation wave in the banking world. Today, it’s optical scanners that read the bills you’re depositing and the information off cheques. Tomorrow, being tested today, is face recognition and fingerprints to make it much safer than your four digit PIN. Can’t wait to see what the next wave will be after that!

If you’ve got your favourite NFL players list for the start of this season, you may want to add someone. It’s Alfred Morris, a running back for the Dallas Cowboys. Since Rob Grankowski retired never having spent a dime of his $54 million salary, Morris is my new NFL hero when it comes to saving money. A rare example in football! Morris still drives his 1991 Mazda that he calls “Bentley” and bought from his grandmother before he ever made it into the NHL. Yes, a 1991 – and he’s made $7.5 million so far. Love that as a role model!

Your Loyalty Is Costing You BIG Money

Below are the screen shots of a flight from Victoria to Edmonton. I picked it because I was booking it – and that’s what got me thinking how much WE have to pay for loyalty…

The Air Canada basic fare is $202. No seat, no checked bag, no frequent flyer miles. Pay $23 more and you get HALF of the frequent flyer miles. Or pay $44 more for 100% of the miles, a seat selection, and a checked bag.

Westjet’s basic fare is $160. So right there it’s $42 cheaper than Air Canada if you were a free agent and just shopped by price and not loyalty. But after that, Westjet is the same as Air Canada: Basic fare is zero reward dollars in their program for tier levels and perks. Pay $23 more and you get only the reward dollars. Pay $90 more for those rewards and a seat selection and checked bag.

One charges you $23 to get your points, the other charges $44. You’ll need $3,000 total (before taxes and fees) to be a somebody in their loyalty programs, and always need to pay way higher than basic fares to earn any! That’s about 12 flights which would cost you almost $300 to $500 in order to BUY your loyalty points. AND you could never fly the other airline.

As a free agent, I took the $42 cheaper flight, skipped the $23 to get my reward dollars, let the computer pick the seat instead of spending $20 or so, and my credit card waved the $30 checked bag fee. That saved me $115. THAT is a lot of money – but not something I would have done last year when I was tied to Air Canada! Even if you make the “silver” Westjet level – have a look what that gets you: 6 free lounge visits, priority boarding (the flight leaves when everyone is on – not just your zone 2, though, and two free checked bag that your Westjet credit card can get you anyway. Yes, you do get to use the reward dollars towards future travel. (Air Canada is pretty much the same rewards but with two lounge visits.) That ain’t much for about $4,500 of spending ($3,000 plus all the taxes and fees for each flight).

For 99% of us, take the cheapest flight at the cheapest price. Pay the rip-off luggage fee if you don’t have their credit card to get a free bag. And for flights under 2 or 3 hours – forget paying for a seat. I’ve done studies that show row 5 arrives at the same time as row 26. The seat pitch is awful and there’s no leg room. Step up to buying a seat only if it’s a long flight.

Hurray! I’m Now A Free Agent! (Saving $1,500)

On average, we’re in eight different loyalty programs and some of them are costing us way more than the tiny benefits we (may) get.

For years, I’ve been a medium sized somebody with Air Canada (50K Elite) where I had lounge access, two free checked bags, priority boarding and no lineups at check in. This year I’m a small somebody and lost priority boarding and lounge access. Yet, somehow I adjusted. Sure I miss the lounge, but most connections are less than two hours, and I’m just fine.

In the next month I have about 10 flights to book. I wrote down roughly what that would add up to: Around $2,200. But I can’t stay a “somebody” unless I reach $3,000 (with Air Canada and Westjet – they’re both the same) and that’s on base fares excluding all the fees and taxes. So I’d have to book more expensive tickets by over $1,500 just to stay a somebody AND would HAVE to fly only Air Canada or Westjet, or I’d dilute my earnings and not make it in either one. That applies to most loyalty programs: To get the bigger rewards you can’t be a free agent and shop elsewhere.

That seems and is stupid. (That’s why vast numbers of business travels purposely wait until the last minute to book when prices have gone way up. It maximizes their bonus levels and it’s their company that pays the ticket and the price for that.) But when we try to do that, we don’t shop around, we stay blindly loyal because we want that reward level!

Instead, I checked Westjet on a flight to Victoria this month. Their flight gets in at 9pm vs. the Air Canada at 11:30pm. That’s almost three hours of extra sleep. I also checked the last Victoria to Edmonton flight the next day: Same price on both airlines, but Westjet can get me home at 10 pm vs. 1 am for Air Canada. On the other hand, the only lunchtime flight to Grande Prairie in two weeks (August 29th) is $140 on Air Canada vs. $284 on Westjet. So of course, I booked Air Canada for that one. Ahhhh….the joy of being a free agent and looking out for my wallet instead of others!

The same applies when we see the “bonus Airmiles” offers. We’re chasing the points, but in my experience, for the 10 most common things I buy (heads up that I’m a bachelor, so it includes cookies, Bolthouse juice, Tasters Choice, etc.) Safeway/Sobey is at least 30% more expensive than Presidents Choice or Walmart. So we get three or four bucks in Airmiles while possibly spending $20 more on what we’re buying!

We, and that includes me, can be so brainwashed or blindly loyal we’re constantly tripping over a loonie to pick up a dime! Your point earnings with every program are between one and 1.5 percent. That’s it! So make sure you don’t overspend by more than 1.5% at the register or you’re losing money!

Stay loyal to friends and family – just don’t extend that same loyalty to companies who brainwash you, and aren’t ever going to be loyal back to you!

Not Sure I Want to Swoop (Airline)

This morning I was looking for a cheap way to get to Phoenix September 10th. I don’t care if I fly to LA, Vegas or direct since they’re all within five hours drive. Whatever is the cheapest flight AND where I can get a cheap car rental. That’s normally a trick because Vegas may be a cheap flight but generally way higher car rental rates…and then it doesn’t make sense.

So I looked at Canada’s newish deep discount carrier Swoop. Their Edmonton Vegas direct flight is $92. But they will charge you for EVERYTHING. That’s the business model of deep discounters. If you can go with just what fits in your purse or a small duffel bag that fits under your seat – you’re good to go. If you need to “rent” space in the overhead, that’ll cost you. I do have a regulation size carry-on suitcase. But check the Swoop details really carefully! My “every airline is fine with it” carry-on bag is two inches too long at Swoop.

Finding that out at check-in will cost me $45 checked bag. (vs $35 at time of booking). Since I also need to bring my golf clubs, that’s another checked baggage fee. The price at Air Canada was $245 and Westjet for the same day (checked at the same time) was $267. Those are both way overpriced and may or should drop. But the point is to be really careful that you don’t end up paying more in total!

One more thing that may or may not be a consideration for you: I’ve had three buddies stranded when they had plane trouble. The last one was in Kelowna trying to get back to Edmonton. With (her perception) of really bad communication, the flight was going to be 4pm…then later that night…and ended up at 4 pm the next day. That was 2 cab trips to the airport and an extra hotel night and missing a day of work. NOT a way to save money.

Sure, I might fly them out of my home city. If there’s an issue I can go back home. But not sure I’d risk the return flight with any airline that doesn’t have more than one flight a day to be able to transfer me to another flight. Buyer beware!

Tip Your Flight Attendant & Don’t Advertise Your Credit

Next time you fly, don’t forget to tip your flight attendants!

Whatever you think should be the priorities of your flight attendants, you may be wrong: Yes, you read that right – it’s here: Frontier Airlines wants you to tip flight attendants when they sell you drinks, juice, duty-free, or what airline pretend is a meal. The credit or debit card machine is programmed for you to enter a tip, and even has the suggestion that you should tip 15 or 20 or 25 percent. It works exactly like the machines in a restaurant, just at 30,000 feet.

Their media relations department spins it to say that millions of dollars in tips have already been generated which they claim proves their passengers love the idea. (In an interview with Clark Howard).

Behind the scenes, and the real reason for it, is that the low cost airlines want to reduce costs. You pay tips which lets them negotiate lower wages… Flight attendants lose in eventual lower base wages and you lose by paying baggage fees, carry-on fees, seat selection fees and now tipping your flight attendant. And yes, it’ll start coming to other airlines. Count me as one of the people who will NEVER be doing that…Good idea or horrific?

Don’t advertise your credit problems:

Here’s a heads up for two people I passed on the highway yesterday and many others: Subprime car financing is for people with bad credit. Most of those lenders do it through car dealers, but two of them lend direct by also selling you their retail-priced vehicle, and make money on both ends. After all, people with poor credit aren’t in a  position to negotiate the price or the rates.

The rates are around 15 to 19 percent and upwards of $1,000 in fees. If the person stops and does the math, it will literally be cheaper to take a cab or Uber daily for a year or two until their credit rating is healed. Instead of a rate 500% too high, spend the $20 on the Money Tools book from Mosaic!

But the heads up is actually to make sure the subprime dealer does not put their decal on the back! It’s great to have a student drive sign, but these dealer decals tell the whole world you have REALLY bad credit. That might be something you don’t want to advertise everywhere you go.

THE Best Place To Shop & Save

As discussed this week from Phoenix, Dillard’s Clearance Center is one of my go-to places for shopping in the U.S. Just google them and you’ll find their clearance centers in California, Ohio, Arizona, and other states.

These aren’t fancy stores, just racks and racks of last years’ merchandise – unloved and unsold. Everything in the store is 60% off – period. That may get you a good deal on some things, but I look for the weekly additional discounts. They rotate them every Tuesday. This past week (hurray for me) it was an additional 65% off on mens shorts, dress shirts, and casual pants.

So on a $50 sticker price (careful as sticker price is as made-up as it is at Winners, vehicle MSRPs, the jewelry business and for a mattress) you would pay $17.50 with the permanent 65% off. The additional 60% off is from that “new” $17.50 and then makes it $7. Casual pants for US$7, 100% cotton dress shirts for under $10, and thousands of shorts to choose from under $5. LOVE that. Sorry, ladies, I know three quarters of the stores are for you – but you’ll have to do your own discoveries.

If you can find a better prices elsewhere – let me know…

Cheap US Cell Phone Plans

Since I keep getting asked, here are some of the current one for light use and NO contracts. They’re for light use. If you’re cruising the internet a lot, they’re not for you due to speed and restrictions.

You always want to start your search at  Clark Howard is the foremost consumer expert –  period. Search there under “cell phones” and you’ll learn more than you could ever imagine.

I used ting. I travel to the US occasionally and want a cheap plan with a US phone number. Ting charges me a flat $6 a month when I’m not using it. When I make one call, it triggers a $3 charge that month (for 1 to 100 calls) including those to Canada and Mexico at no added charge. When I send the first text, it’s an additional $3 that month – again, for 1 to 100 text message incoming or sending. So at most I’ll have 1 gb of data (I need it/use it just to get an Uber ordered, look up a hotel address, a hockey score, the weather, etc.) So when I’m in the US, the most I’ll pay is the base $6 and $3 for texts and $3 for calls = $12.

The alternatives are: Tello at a flat $10 a month with talk, text and 1 gb data on the Sprint network or Unrealmobile at a similar rate and also on Sprint. So both will need an unlocked phone (if you have one already) and a Sprint CDMA SIM card. You can get them at Target (I think they’re $3) or Best Buy. With all three (including Ting) you can go to their website and enter your phone information to see if your phone is compatible and enter your SIM card number.

One more thing: You may want to just get it set up from scratch with a new telephone number. Porting (taking your number with you) may be quick or may take a while. Unless you have a ton of people who have your number, it may be simpler to start from scratch. That’s your decision….

Whatever you decide, this may be WAY cheaper than paying the big Canadian cell carriers their $5 a DAY for roaming in the US or their monthly flat rate.

BIG $$$ Savings On Travel

Next week I’m off to Phoenix to escape the horrible Edmonton weather and for another appointment with my Mexico dentist (search the radio stories for ‘dentist’).

Since most of this happened by 6 AM this morning, and it’s fresh in my mind, I wanted to share some big savings insights. But heads up that my definition of savings is where you have to buy something and get it cheaper, such as a flight or hotel (because you do need to sleep somewhere). Savings is  not for golf. Yes, I’m going to golf but it’s spending less and not savings because I don’t have to golf!

Flight: I needed to go on a specific day. But the cheapest flight was $500 – which is insane and double what it should be. So I used 12,500 of my Aeroplan points and just paid $120 taxes. That’s a real saving of $380 and THE best way to use your points. The return flight was $140 and that I paid myself as it wouldn’t make sense to use up points on a flight that cheap.

Hotel: I found a 3 star for $38 in Tempe and a 3 star for $40 in Scottsdale. So I clicked at on the Tempe one and great news: Hotwire has now started showing any so-called resort fees before you book! This hotel has a $10 rip-off fee per night! So changed to the Scottsdale one and saved myself $56.

Purchases: I need three things from the U.S. for my business. One order for seminar supplies was going to cost $46 Fedex to Canada plus brokerage fee plus customs and duty for $70 total. Instead, I’m having it sent to my Phoenix hotel with free shipping. The same for two Amazon orders. One was going to be $14 and the other $22 shipping to Canada. Again, shipping it to the hotel is free and saving me $36. That’s $128 US

Car rental: Every city in Canada and the U.S. has big fees added to a car rental at the airport. In Edmonton it’s some kind of improvement levy, in Phoenix is a stadium tax and two other ones. That way politicians can get free money from tourists who don’t complain and not tax locals who might not vote for them anymore. So I rent from the closest city location that is not at the airport. For this trip, I’ve reserved a compact car for $202 total – yes, it’s way too expensive. But an airport rental right now is $280. I’m ahead $78 less an Uber of $10 to get the few miles to the location. I also keep checking for price reductions every day before I leave. If it drops, I re-book it – and have done it twice to get from $240 down to the current $202.

That’s a $380 Can$ saving plus $252 US$ in real savings for a total of $715. THAT is some real big money for maybe two hours of internet searches.