Sainsbury's Nectar card points reduction

Marksfish

Had my Nectar credit card since Amex started charging for theirs and have always used it to save my points for the December shop. Looks like the points value is about to be reduced again according to the letter I received yesterday:

From 1st November, any transactions when you pay with your Sainsbury's Credit Card in Sainsbury's, Argos, Habitat & Tu Clothing will collect 1 point per £2. We'll also give you 1 point for every £5 spent elsewhere.

Mark

wiseonesomeofthetime

MSE did an article on this a few days ago.

https://www.moneysavingexpert.com/news/2022/09/sainsbury-s-cuts-the-amount-of-nectar-points-you-can-earn-when-s/

I think you've summed it up nicely though

cymruchris

Offers for many financial products over the years tended to be strong at product launch to attract new customers, and then over time, get diluted, knowing that the majority of customers won't bother to move on to another product. The money-savvy will, but they are in the minority. 

WillPS

cymruchris said:

Offers for many financial products over the years tended to be strong at product launch to attract new customers, and then over time, get diluted, knowing that the majority of customers won't bother to move on to another product. The money-savvy will, but they are in the minority. 

Unusual for such a steep reduction to the "in-store spend" category on a credit card though. For contrast, when the Partnership Card changed its earnings rate, halving the 'everywhere else' rate the 'in JL/Waitrose' category actually went up.

Sainsbury's Bank's credit cards were already very poor - this nerf should encourage anybody using one to move elsewhere.

Amex Nectar will pay 2 points per £ everywhere that accepts it except Costco with a £25 annual fee after the first year. Barclaycard will pay 1 Avios (which can be exchanged for 1.6 Nectar points) per £ everywhere for no annual fee.

lr1277

Let’s not forget the way banks fund these rewards is from their share of the fees charged by the card company; inter-change fees I believe.
My guess is that the EU and British rules have reduced the inter-change fees, there is less money to provide rewards.
So one way forward might be for the government to raise the inter-change fees, in which case banks MIGHT raise their rewards. But this would also mean retailers across the board would put their prices up. My speculation.

WillPS

lr1277 said:

Let’s not forget the way banks fund these rewards is from their share of the fees charged by the card company; inter-change fees I believe.
My guess is that the EU and British rules have reduced the inter-change fees, there is less money to provide rewards.
So one way forward might be for the government to raise the inter-change fees, in which case banks MIGHT raise their rewards. But this would also mean retailers across the board would put their prices up. My speculation.

Yes, although bear in mind that in this case the interchange rate is also being paid by Sainsbury's, so if anything the interchange rate falling actually helps in this scenario.

Typically in affinity/co-brand type situations the 'brand partner' pays the bank an extra commission whenever the card is used in their own locations, in part to cover the extra rewards but also because the whole point brands offer these cards is to drive loyalty and bring customers back to their own stores. I don't know how it works with Sainsbury's/Tesco as they actually own their own banks outright; if the bank are receiving no commission from Sainsburys/Argos (other than interchange related revenue) and yet also expected to boost profitability... incredibly short sighted on both sides but believable. (I don't know this is the case, by the way, totally speculating - but what I do know is JS can afford a loyalty bonus of more than 0.5% given they offer 3% back on Spree/Ode cards and up to 5% off giftcards on 'employee perk' type websites).

Grabs39

Just got my letter; probably time to close that card.  I'd stopped buying petrol at Sainsburys anyway, which was my main reason for having it.

Calidad

Disappointing really. 

Especially as I’ve had it for less than 6 months. Might have to consider Aldi instead, or perhaps look at the Amex Nectar (unfortunately there’s no bonus for existing Amex card holders though). 

Overall, pretty stingy from Sainbury’s though. 

Ebe_Scrooge

Calidad said:

Might have to consider Aldi instead

Aldi don't provide credit cards.  Or what that a typo?

But there's no denying that your weekly shop will cost a lot less from Aldi than it would from Sainsbury's.

Calidad

Ebe_Scrooge said:

Calidad said:

Might have to consider Aldi instead

Aldi don't provide credit cards.  Or what that a typo?

But there's no denying that your weekly shop will cost a lot less from Aldi than it would from Sainsbury's.

Exactly right, though as you’ve suggested the weekly shop will come in considerably cheaper at Aldi. We tended to opt for Sainsbury’s due to wider variety and choice, coupled with the Nectar points. Definitely food for thought now though! 

prowla

TBH, I just ignore the stores & cards points systems; if I get something then great.