Best Buy Rewards Zone: An Interesting Beast
After receiving an email recently, I was reminded of the Best Buy Reward Zone program (more information), and took a minute to take a second look at it. The program is pretty simple — at the most basic level, you earn one point for every dollar you spend at Best Buy, and once you earn 250 points, you get a certificate good for $5 off. This essentially makes Best Buy Reward Zone points worth about $0.02, or, in other words, it offers potentially 2% off in the future.
What is interesting, however, is the direction that Best Buy seems to be taking with the program: heading more and more towards the frequent flyer program model that the Airlines have been perfecting for decades. Three developments seem to indicate this.
One: The Reward Zone Shopping Mall
The email I alluded to earlier was the announcement that Best Buy had launched a Reward Zone Shopping Mall, where instead of earning cash back for your purchases made through the portal, you earn Best Buy Reward Zone points. Airlines have been doing this for a while now, and even some credit card companies offer more “points” through these sorts of portals, but this is the first time I can think of that a company has done something like this for a rewards program this is so closely tied just with itself (credit card points, and even frequent flyer miles, to an extent, can be used with a ride range of services and companies; Reward Zone points are only for Best Buy).
Two: Best Buy “Elite Status”
For frequent business flyers, part of what makes the loyalty game so addictive is the “elite status” that airlines offer; fly enough on a major airline, and they will shower you with perks like double miles on flights, first-class check in, expedited security lines, special seats, waived fees, free drinks, and more. Best Buy recently introduced its own elite status, “Premier Silver,” where if you spend $2500 in a year, you’ll have access to more points, special offers, expanded customer service, and more.
On some level, I am surprised we haven’t seen more companies (explicitly) offer such an “elite” status program — it makes sense to treat your best customers right. But I think the fact they introduced this system also speaks to the type of customer Best Buy thinks it might have been missing out on or losing.
Three: The Obligatory Credit Card
Finally, Best Buy, of course, offers a credit card associated with its Reward Zone program, which offers an extra point (~2%) on all of your purchases at Best Buy, and a half point (~1%) on all other purchase. Many, many companies obviously offer their own branded credit cards that offer discounts or cash back for purchases made at the store, but it still seems unique to have a retail store credit card offering rewards so closely tied to a loyalty program.
Verdict: Where is Best Buy going with this?
Best Buy clearly seems to think they have a situation where the program might turn into something like what the major airlines have been running — a program where people actively accumulate points not just from in-store purchases, but also from partner activities and what not; Best Buy seems to think that their reward currency (certificates for discounts in store) is substantial enough for people to focus rewards into it. What comes next? Point transferring with other loyalty programs? Points for partner activities?
While all of this is fascinating to watch, the Achilles’ heel of the Reward Zone program is how the certificates are issued — they are issued automatically, and expire within a certain period of time (I had a $5 certificate automatically issued on 04/08/2008 expires on 08/02/2008, so about four months). This is what makes the program different from the wildly successful frequent flyer programs — you can’t save up Best Buy points.
Final Thought: Its obviously worthwhile to register for the free program if you’re going to be making any purchase at Best Buy, but unless you’re a very frequent shopper at Best Buy, the Reward Zone program is not the best place to save rewards.
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I am a member of the program, but agree that the rewards certificates should not be issued automatically. I currently am trying to not spend any money but now I have a couple certificates that if I don’t use will be expiring, this means that if I don’t use them, it’s like missing out on $10.00 but at the same time, know that I probably shouldn’t go to Best Buy because I can’t afford it and have nothing that I really want/need at the present time. They should let them accumulate at least up to a certain amount or for a given period of time (I think I would prefer the amount thing because then if you aren’t earning more there is no pressure to redeem them) and then I could at least make the purchase on something that I really wanted rather than something that I might make use of but am buying because I don’t want to lose out on the rewards.
MJFD, I agree completely — I , too, have about $10 in rewards that are about to expire, and I am not quite sure what to do with them since I don’t really need anything right now. It really feels like Best Buy is trying to force me to buy something, which isn’t exactly the feeling I should be getting for a rewards program.
I think best case scenario would be if they were points that didn’t expire for a while, like how frequent flyer programs work. Part of the problem, though, I think, is that Best Buy sells small items as well as large items; a frequent flyer program can work the way it does because the cheapest redemption option is worth a couple hundred dollars. Perhaps Best Buy should institute some sort of minimum purchase amount in exchange for making them valid longer? I don’t know.