Consumer Watchdog: Spend big for small gain

Cecelia Tuuhetoka shops at the nearest supermarket. Photo / Janna Dixon

Just when your wallet couldn't hold another loyalty card, AA has launched a scheme that promises big savings on fuel.

It is an enticing offer but a closer look reveals "Smartfuel" only really rewards those who splash out with its partners.

This includes most AA-owned companies, some pharmacies, Nappies Direct, TelstraClear and 18 other businesses but no supermarket or bank.

When you do business with these partners, per-litre discounts collect on your card - you would earn 4c a litre off petrol by spending $40 at Hammer Hardware, then 20c a litre off by getting a warrant of fitness at Vehicle Inspections. For the next six months, Caltex is offering members 4c off a litre anyway, taking this total discount to 28c a litre - a $14 saving on a 50-litre purchase at Caltex or BP. The discounts are slightly better for AA members.

Use the accumulated discount once and and you start again.

Massey University's marketing professor, Malcolm Wright, says for some people, these immediate discounts are better value than earning the occasional coffee-maker or DVD player through Fly Buys.

"New Zealanders are extremely motivated by petrol discounts. You get many people switching if there's a free glass or discount," he says.

But Wright said Smartfuel would be more desirable if it signed up a supermarket. Currently, those who shop at New World or have a BNZ home loan can earn a lot of Fly Buys points with minimal effort. Furthermore, most Smartfuel partners require a $50 or $100 spend before any points are earned.

AA spokesman Simon Lambourne says the Smartfuel team is working to sign up more businesses, especially major retailers.

Bottomline:

Smartfuel is great for people who want instant savings on petrol and are prepared to use businesses affiliated with the scheme. AA members get slightly better deals, too. Fly Buys suits those who shop at New World, have a BNZ bank loan or spend a lot of money on petrol and are happy to stick to Shell and Z stations.

DISCOUNTS NOW, PLEASE

Cecelia Tuuhetoka, 32, thinks rewards programmes can be more trouble than they are worth.

She says Fly Buys has never appealed and she doesn't keep coffee cards. She hadn't heard of the new AA Smartfuel scheme either and says it would take some compelling discounts for her to sign up.

The only loyalty scheme Tuuhetoka uses is Countdown's Onecard. She says that appeals because the focus is on instant discounts rather than collecting points.

Convenience influences her loyalty. She says she used to do her grocery and petrol shopping at Pak'n Save, but the hassle outweighed the price difference. "Onecard has some good discounts, but I go to Countdown because of the location. It's the closest."