Terrence Belford Toronto Star Newspapers SPECIAL TO THE STAR
Travel Rewards
Michelle Gabriele says she always gets a kick out of using her Bank of Montreal debit card. Yes, the downside is that using the card to withdraw cash means she has less money in the bank. But the upside is that every $40 she withdraws - either in cash or to make a purchase - wins her one Air Mile point.
Those reward points along with the one for every $15 spent on her BMO Mosaik MasterCard can add up. Maybe not for dream trips or big-ticket items, since the 29-year-old human resources specialist from Whistler, B.C., says her income and her spending are just not in that kind of league.
"But I have been able to do a couple of nifty things," she says. "Once I used points to rent a car between Vancouver airport and Whistler because no bus was running at the time my flight was due to arrive and the second time I bought a DustBuster from the Air Miles catalogue.
"The DustBuster was an impulse purchase. That's what I like about getting Air Miles with both my Mosaik card and my debit card. They are easy to collect and when the catalogue comes in I can make impulse buys if I want to."
The idea of getting rewards points through debit cards as well as credit cards was regarded as a Canadian banking industry coup when BMO launched the program in June 2007. The result was that people switched banks and BMO was the big winner.
"The program continues to exceed our expectations," says Lynne Kilpatrick, BMO senior vice-president for personal banking. "It has been an enormously successful initiative."
Experts say one of the rules of banking is if you can get a customer to take three of your products, chances are good you will pick up all of their other business as well. Well aware of that principle, BMO also offered the chance to get 40 per cent more Air Miles on each purchase if the customer added other bank products to their Mosaik card and debit card.
Now another bank has upped the rewards program ante.
It may have taken a year but the Canadian Imperial Bank of Commerce has decided to enter the fray. While BMO focuses on Air Miles, CIBC offers Aeroplan points. The bank says its CIBC Aerogold Visa card has been the most popular credit card in Canada since it was introduced with the Aeroplan rewards in 1991.
Since June, CIBC has been offering 100 Aeroplan miles a month to holders of its CIBC Unlimited Chequing Accounts. There are rules, of course. To qualify, customers must either sign up for one direct deposit every month or three direct debits to their account. To sweeten the deal, CIBC also offered 15,000 bonus points for new accounts until the end of last month; after that the bonus dropped to 5,000. Existing customers who chose to add the Aeroplan optionreceived 2,500 bonus miles."We see it as a win-win-win situation," says Colette Delaney, CIBC senior vice-president for GICs, deposits and payments. First, Aeroplan collectors get another way to earn points; second, the bank reduces transaction costs by encouraging direct deposits and debits; and third, CIBC corporate customers benefit as their employees are provided with an incentive to opt for direct deposit of their paycheques, she explains.
The chequing account option follows on the heels of a new Aerogold Infinite Visa introduced in June. Infinite cardholders chosen from among existing Aerogold customers received a 2,500 Aeroplan Miles bonus along with their snappy black card.
While the program is too new for the bank to offer any hard facts about its success, Delaney points out that more than 2,000 CIBC Aerogold customers a day fly on their accumulated reward points.
Gabriele says she dreams of earning enough Air Miles from her debit and MasterCard transactions to take a dream trip. "I am in saving mode right now," she says.
More than likely, however, the lure of the Air Miles catalogue will again prove irresistible.
"I kind of like being able to splurge a bit just from the points I earn doing my everyday spending," she says. "I know that almost every day I am earning points towards stuff I want just by doing what I normally do."
Simon Wilson FOR THE TORONTO STAR JONATHAN HAYWARD CANADIAN PRESS Banks are sweetening deals through debit and credit cards. Extra reward points are being offered to help customers realize their travel dreams. Simon Wilson FOR THE TORONTO STAR
