$100 Passive Income Using Reward or Discount Programs [Guide]
For many years, businesses have been giving customers rewards or even discounts for their loyalty. But many people do not use these programs and may be missing out.
What are reward or discount programs? In reward or discount programs, loyal customers earn points (sometimes money) which is given back in the form of a reward. Rewards may include discounts, rebates, lower-costing travel, special treatments and more. The customer must accumulate a certain amount of points to redeem their reward.
Many people capitalize on reward and discount programs by using them as ways to make an extra income. And why wouldn’t they? Competition in many industries has become fierce, and only businesses with an edge are able to retain loyal customers. This guide will show you how you can make passive income from reward and discount programs as a beginner.
How to Make Passive Income from Reward Programs [Guide]
3 Types of Reward Programs
There are various kinds of reward programs with various rewards. Before joining any reward programs, it’s best to have a look at what programs are available to you depending on the outcomes you would like.
These programs have the same basic premise – you earn based on how much you spend, usually after meeting a certain minimum dollar amount during your purchase. You can earn also earn rewards based on how many visits you make to a given business, or based on the type of products you decide to buy.
Cash Back or Rebate Programs
1. Discount Programs
You can also join discount programs that provide you discounts on the items you buy. With these programs, you will not get the rewards as direct cash, but instead, you will make savings, which is obviously another way to save on your spending.
Some online retailers offer a discount on the entire sale, while some discounts or rewards are offered on specific items. For instance, you might get a discount of 10% when you buy a tray of eggs. In other cases, you get a free product when you make your purchase.
2. Point-Based Reward Programs
3. Tiered Customer Reward Programs
Read This Section No Matter What!
Something that is very important to us is to ensure you do not use reward programs to your disadvantage. These programs should not entice you to spend more to gain the rewards. In reality, these programs should only be used as a supplement to spending you already have planned. If you are spending more to redeem more points, that would not only be totally counter productive, it would be putting you in debt (towards yourself or your bank) for things you questionably need. Be a smart consumer and ask yourself if you really needed the items before purchasing them.
Choosing The Best Reward or Discount Program for Your Needs
Examples of Popular Reward and Discount Programs
- Sephora Beauty Insider: “Sephora’s Beauty Insider loyalty program has fewer members than Ulta’s Ultamate Rewards program, but it is growing faster. Beauty Insider membership is forecast to grow by 47% between 2016 and the end of the company’s 2018 fiscal year, from 17 million to 25 million. Ultamate Rewards membership has grown by 28% since 2016, from 23.4 million to 30 million.” (Source).
- Starbucks Rewards: Starbucks Rewards offers you points that they call “stars.” You get 2 stars per Dollar spent. With enough stars, you can “get free food, drinks & more”, “free brewed coffee & tea refills” and “exclusive offers, personalized for you.” If you love Starbucks coffee and go there regularly for yourself, or your colleagues, then check it out. (Source).
- Amazon Prime: Amazon Prime is one of the most popular and lucrative reward programs around, as it can be applied to literally millions of useful items and includes shopping and entertainment benefits. (Source) Amazon Prime provides “fast, free and convenient ways to get millions of items, from unlimited two-day shipping to same-day and 2-hour delivery in select areas.” Other benefits include:
- 20% savings on diapers and baby food subscriptions for prime members
- Free access to thousands of books, magazines, comics, Kindle Singles, and more
- Uber Rewards: Uber’s reward program offers a point for every eligible dollar you spend on rides and Uber Eats, and earn $5 Uber Cash for every 500 points. Plus, get 2x points on UberX, and 3x points for Uber Black trips” (See terms and conditions here)
- RBC & WestJet: Open to Canadians, RBC and WestJet teamed up to offer Ampli, a program that provides “members with merchant offers, flexible rewards and exclusive bonuses. In addition, members who spend on RBC cards and fly with WestJet will further amplify their rewards.” (Source)
Check out this awesome list of 53 Best Customer Rewards Programs for more ideas (opens in new window). From fast food restaurants to pharmacies, these are the most recommended store rewards programs around. They offer freebies, coupons, and other perks!
Avoid Useless Reward Programs!
There is no need to sign up for a program that you won’t actually use, or that gives you branded items that are useless or that you can’t sell. If you don’t go to Starbucks, don’t sign up for their program! The best programs give you actual cash or discounts on things you actually use or need. Great programs will give you points, which you can turn into cash or useful rewards. At the very least, you should use a reward or a discount program that gives you financial benefits that you can use in a multiplicity of ways, including allowing you to redeem them for cash.
Also, stay away from programs that put excessive demands on you as a consumer. The last thing you need is a reward program that forces you to change your purchasing behavior in order to start reaping the benefits. Remember, the idea here is to create a passive income stream, and having to make extra effort goes against that. Otherwise, to make good money off these programs, you also need to make sure you take them seriously by trying to find the best programs for your needs, may that be for travel, food, finance and so forth.
Signing Up to The Best Programs for You
Now that you have signed up for your choice rewards program, you can start spending to start getting the points, discounts, or cash. Don’t buy more than you have to. However, you will notice you might be inclined to continue going to a particular business to ensure that you increase your rewards.
Just have to go about your life as you normally would. Buying gas when you need to, taking flights as you normally would, and using your credit card to shop as you typically do. You also have to be patient since the points need to accumulate over time before they can be redeemed.
Redeem Your Rewards
How Passive Are Reward or Discount Programs?
ROI (Return On Investment)
Who has the best loyalty rewards program? Some of the best customer loyalty rewards programs are run by Starbucks, Amazon, Target, Bed Bath & Beyond, Barnes & Noble, Toms, The North Face, Virgin Atlantic, and Uber.
Are Loyalty and Rewards Programs Passive Income? Customer and reward programs can provide passive income if you sign up to programs you will actually use and that do not change your purchasing habits. Otherwise these programs may entice people to spend more, which would be counterproductive.