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Canadians among the most points-crazy people on the planet

Karen Donston's grocery cart often looks as if she's prepping for a national disaster. She might have 70 cans of Chef Boyardee pasta, or six dozen boxes of cereal (this load takes two carts), or bag upon bag of frozen vegetables. Good thing the Winnipeg mother of two is not bothered by the odd stare. The last laugh is hers: She has mastered a math game that turns those cereal boxes - and the $200 she spent on them - into a $600 flight to Kingston for a family visit, or, if she waits for the next run on frozen fries, perhaps a Caribbean cruise, all paid for with points from her Air Miles card.

Ms. Donston, a 42-year-old ad rep with a fistful of loyalty cards, is what Air Miles calls an "avid" collector, who diligently and strategically tallies the points. She knows that newly renovated grocery stores offer bonus points for a limited time, so she'll drive across the city to snag them, or to get gas at point-friendly service stations. "People only think I am crazy until they want to do it themselves," she says.

Canadians are among the most point-crazy people on the planet. We love handing over those plastic loyalty cards when we fly or pump gas, in order to rack up a points account that we can use to buy a blender or a trip to Vegas.

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According to a 2009 study, the average Canadian household uses nine different loyalty programs - 50 per cent more than their American neighbours.

"There is a certain Canadian mania," says Lindsay Meredith, a marketing professor at Simon Fraser University. "I think it's the same genes that drive our British Columbian response to search out a litre of gas for exactly .2 of a cent less than the guy down the street."

The recession has fuelled our fetish: Last fall, one-fifth of Canadians surveyed said they were using their reward points to stretch their budgets, and companies such as Aeroplan saw more people cashing them in for Christmas gifts as opposed to fancy trips. The fastest-growing group of collectors are those between the age of 18 and 25, a demographic hit hard by the slow economy.

This trend certainly makes companies happy - loyalty programs make for loyal customers, who sometimes don't bother redeeming the points that lure them into the store, are less likely to comparison-shop, and whose choices can be easily tracked and charted every time they pull out their card.

But the appetite for points also has some governments and marketers thinking: If Canadians are willing to cross town for a handful of loyalty points, what else might we do for them? All those Air Miles points might have a value beyond vacation cruises and kitchen appliances - they might help build a greener, healthier nation.

Far beyond travel

This is Karen Shiller's list: a trip to New York this month with her 16-year-old daughter, a family flight to London booked for this fall, a Bose CD player, rain barrels and one kayak (hand-delivered to her home). These are the items she has recently "purchased" with her Aeroplan miles, which she collects by using her credit card for everything she buys, even small errands at the convenience store.

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She used to stick to the travel rewards, but during the recession, Ms. Shiller, a former lawyer and English teacher at Ottawa's Algonquin College, and her partner, a real-estate developer, began using some of their 500,000-plus miles to get items they would have felt guilty about purchasing with cash.

"It became a way to give ourselves a little treat," she says. "It's like spending money, but it doesn't feel that way."

The country's fondness for loyalty programs may be, as Prof. Meredith suggests, at least partly in our genes; Canadians have traditionally been savers, an immigrant nation of bargain hunters averse to debt and big on nest eggs - although as credit-card spending escalates, those habits are quickly changing. Perhaps it dates to 1961, when Canadian Tire money - dubbed the nation's "second currency" - was introduced; roughly 90 per cent of those bills still find their way back to the store.

The biggest reason is probably simple logistics. Unlike the United States, Canada has more national banks and retailers, which allowed plans such as Air Miles, to arrive on the scene in 1992, allowing customers to collect points from a virtual mall of stores and locations, rather than one card per retailer.

Aeroplan has expanded from just offering flights and travel deals; its recent offerings include marquee items such as a Gibson guitar signed by Blue Rodeo's Jim Cuddy. (Yours for just 117,500 points, which are then donated by Aeroplan to the charity War Child Canada to reduce its travel costs.)

Of course, retailers such as Shoppers Drug Mart aren't just giving away points or cashbacks for nothing. They are counting on the plans creating repeat high-end customers, who might buy products they don't need or won't use just to rack up points or stop shopping for a better price at the competitor next door.

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Then there's the information that gets collected, Prof. Meredith points out - where you shop, what you buy, how much you'll pay, and, ultimately, who you are. Stores use it to decide what to stock on their shelves, what promotions to send out, how high to set prices. On the positive side, it means your local grocery chain may be more likely to carry the gourmet mustard that you want. On the negative side, they also learn just how to lure you inside to buy it.

Although loyalty plans can't sell an individual's information, they share aggregate data with their clients and sponsors, or use it themselves: Which means that somewhere, there's a computer file with your name on it. "That information becomes very powerful weaponry," Prof. Meredith says.

"Usually when I ask my students, 'Do you mind if they know what groceries you are buying?' they say no. And then I say, 'Do you mind if they know what drugs you buy and how much alcohol you consume?' Then they get interested."

But revealing her spending habits is a cost that Taylor Ferri is prepared to pay - if it means her points will cover at least some of the gas in her daily commute from Markham to downtown Toronto for school. "You're getting something back for free," the 22-year-old public-relations student says. "I know they take your marketing information, but I'm okay with that."

Since she started collecting Air Miles at the age of 18 - her parents urged her to get a card once she was old enough - she estimates that she has saved up about 10,000 points. She has used them to buy a gas gift card, and a global positioning system device, and right now she's saving up for a trip to New York after graduation.

"I am kind of a point freak," she says. "If my friends don't have Air Miles, I snatch their points when I can."

The greening of loyalty

Air Miles is taking Canada's appetite for loyalty plans one step further - toward influencing consumer behaviour in a positive direction for the environment. It's also a bit of green-washing for a program built on flying people around the world, leaving a heavy carbon footprint, though Air Miles says most rewards are now redeemed for consumer goods and services, not air travel.

Six months ago, Air Miles became the first loyalty company to award consumers with extra points when they bought green-friendly products - locally grown meat or organic dishwashing detergent. Instead of driving across town for gas at the right spot, you can now use your points in several cities to get a bus pass (or an electric scooter, if you'd rather), and Edmonton has become the first city where you can collect points by taking the bus.





This week, the Ontario Power Authority began offering 20 Air Miles to every household that simply pledges to reduce their phantom power - the electricity that's expended by leaving computers and electronics running when no one is using them. Twenty Air Miles won't get a collector very far, but in the first day, the program, which is really about raising awareness, earned 1,000 pledges. (Another 10 Air Miles are donated to the World Wildlife Fund for every pledge.) A pilot project in Toronto offered apartment residents points if they took their hazardous waste to a proper landfill - the program saw a 30-per-cent increase in waste drop-offs.

According to Air Miles, the number of Canadians using the program to buy transit passes increases every month - though it's not clear how many are new bus passengers. In its first month, 250,000 purchases were made as part of the company's green program.



If we do that in the first month, imagine what we can do over time," says Andrew Souvaliotis, the chief impact officer with Air Miles, who manages the  company's "My Planet" program. Another venture he's working on would try to encourage healthy eating and physical activity among Canadians, though he won't give details.

In Winnipeg, the very kind of customer that Mr. Souvaliotis thinks he can influence is watching the promotions for the next chance to overstock her shelves - and her points account. Karen Donston doesn't even eat most of those extra groceries. She gives a lot of it away to family or the food bank. Her university-age son sold the extra cereal to his roommates.

She's so good at it that she gives lunch-and-learn sessions to co-workers, and has even accompanied a couple of them to the grocery store for a first-hand lesson. One of her colleagues went to Orlando, Fla., last week, courtesy of her training. (At work, she recently acquired the contract for Air Miles, when she happened to be assigned all the A-letter companies. "I was so excited," she says.)

Her best advice to getting that free trip faster: Be patient, do your math and watch for promotions that can triple your points.

And be prepared to leave the store with 70 cereal boxes piled high in your cart.

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About the Author

Erin Anderssen writes about mental health, social policy and family issues. More

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