Off topic: Sainsbury’s guts Nectar earning from April 2015

I don’t cover Nectar much on Head for Points because it offers little in the way of travel rewards.  I have written about the ability to use your points to book easyJet flights and how the Nectar estore is the only way of getting cashback on an easyJet booking.

I also reviewed the American Express Nectar credit card last year.  This is currently a pretty good deal – no fee for the first year and £100 of Nectar points for signing up.  Amex has tightened up on who can apply, though, and you only get the £100 if you have NO American Express-issued Amex cards at all.

I have also written about how I use Nectar to (indirectly) convert my Amex Membership Rewards points into John Lewis / Waitrose vouchers.  And whether it is better to take Nectar points or Flying Club miles when booking on Virgin Trains.

That is about it.  Here is the new news:

Nectar card

Sainsbury announced yesterday that it is halving its Nectar earning rate from April 2015.  You will earn only 1 point per £1 spent rather than 2 points.  Details can be found on the Sainsbury website here.

This halves your cashback from 1% to 0.5%.  (This page on our sister site Shopper Points shows the best value Nectar redemptions – ie everything which gets you more than the standard 0.5%!)

Sainsbury is clearly doing this to cut costs, confident that Nectar is not a sufficient enough attraction to shoppers to cause them to defect in droves.  It is also ending the practice of giving you an extra Nectar point if you use your own bags – it is bringing in a charge for carrier bags instead.

The announcement implies that change is also coming to the Nectar credit card issued by Sainsbury’s Bank – “Nectar is changing for all Sainsbury’s customers, which means that the way our Bank customers collect points when they use their Nectar card in store will change in the future too.”  Note that the American Express-issued Nectar card is not impacted.

This is unlikely to signify the end of Nectar in the UK (which, few people know, is owned by the Canadian company which runs Air Canada’s Aeroplan loyalty scheme) but it will be a serious blow.

The problem with Nectar, as I see it, is that it isn’t fun.  It isn’t interesting.  You can’t ‘game’ it.  To all intents and purposes your points are worth 0.5p each and it is hard to improve on that.

Tesco Clubcard, on the other hand, is fun.  You can ‘game’ it and you have sites like this one which spend lots of time explaining how and showing you ways to run up points at minimal cost.  It has a level of customer interaction and involvement that Nectar could never dream of getting.

This is, of course, the same appeal of airline schemes.  Every time I write about a new way of earning or spending Avios points, I am effectively writing a big free advertisement for British Airways / IAG.  Poor old Nectar gets left behind.

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Comments

  1. We get quite a good deal from Sainsburys. Have a mortgage with them and every Christmas for the past 10 years we have received £150 in Nectar points. This of course will continue because £150 is £150 whether they they do 2/1 or 1/1

  2. I got an email from Nectar yesterday as part of a pilot group for a new feature called the Nectar Hive. It outlined the key facts as the following:

    • You will collect 10% annual interest on points in your Hive
    • Interest is calculated daily and added to your hive every Friday
    • You can deposit as many of your points into your Hive as you like, but remember you can’t spend points while they are in your Hive
    • You can withdraw points from your Hive at any time. They will be added back onto your account within 24hrs after which you can spend them as usual

    Interesting concept that they allow you to earn interest in the form of Nectar points on the balance deposited. Only downside I can see is if they have flash 1 day redemption opportunities that you potentially wouldn’t be able to take advantage of them due to not being able to spend your points if they’re not made available the same day…

    Very much doubt Tesco will do something similar with Clubcard, but an interesting development…

    • That is just weird. There would be an interesting Amex arbitrage though – move Amex points to Nectar at 0.5p per point then let the 10 per cent interest compound. Then redeem for an Expedia holiday, ebay credit etc.