It seems like no matter where you shop or go out to eat these days, every business wants to give you a loyalty card and encourages you to start earning points by being a repeat customer.
Often these programs give you a treat for signing up, like a free coffee or something to eat. It’s an easy way to coerce consumers, so it’s no surprise it works. And if you have a favorite spot you really like to go to, you may as well earn points for your purchases and rack up some free stuff once in a while.
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Some people like to play the points game on a bigger scale: travel. This is when you save up airline or hotel points, whether directly with the airline or hotel, or via a credit cards that earns points for you based on how much you spend. It seems like a no-brainer for someone who travels a lot for work, for instance. Earn points on every flight, save them up, and go on an amazing vacation for free.
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The points game can absolutely provide some perks, no doubt about it. But according to one financial expert, loyalty programs and point systems are not the gold mine you might think they are. In fact, he’s gone as far as to even call them “worthless.”
Kevin O’Leary has some pretty strong words to share about loyalty points.
Image source: Willard/Disney via Getty Images
Shark Tank’s Kevin O’Leary trashes loyalty programs
In an X post on his official account shared May 7, Kevin O’Leary showed a video conversation in which he shared a controversial opinion about loyalty point systems.
“Worthless, worthless,” O’Leary replied when prompted. “The inflation in points from airlines is absurd. Just look at what you got 12 months ago for what you get now. The most important thing to do with any loyalty program is spend the points immediately. The second you get them. Do not hold onto them. They are practically worthless in terms of how the inflation hits them.”
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“People think, oh, I’m going to amass loyalty points. I’m going to fly to Hawaii. You find out that two years ago it was 30,000 points. Now, it’s 170,000 points. There’s nothing you can do about it.”
However, O’Leary says there is one good way to use the loyalty system.
“So the best way to do it is to find out if you can buy goods and services, like on Amazon, with your loyalty points, and spend it immediately.”
When asked if he engaged in loyalty programs with companies like Starbucks or Walgreens, O’Leary said, “I sign up for every single one. And I blow them out the second I get them. If you’re a sharp consumer, you can save about 2.5 percent of your entire costs every month by just playing the game right. They’re going to send you loyalty, and they want you to never spend them. You don’t want to do that.”
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Readers in the comments of O’Leary’s post seemed to agree with the sentiment.
“I’ve seen this points devaluation happen with my hotel program,” X user Cody Wilkinson said. “Used to get a free night for 15K points, now it’s 25K. Makes more sense to use them right away instead of hoarding them, doesn’t it?”
X user Scott M also made a good point, saying, “The thing we leave out is the only point of loyalty points is to get the consumer to spend more money. That’s money spent on things we would have not bought in the first place.”
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