Bits: £1000 PremEco to Sydney, Nectar profit falls, Expedia / Hotels.com sale

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• tony says:

  28 Oct28 October 08:06

  On the face of it, Nectar seems to offer some good bargains for the Orient Express. You can redeem your points and if you book I think three months out, you get 25% off the headline price.

  Not sure how this compares to other discounters in the space, though.

• n says:

  28 Oct28 October 08:14

  Nectar ran a big advertising campaign recently encouraging people to spend their points? Odd.

• Riaan says:

  28 Oct28 October 09:52

  I’ve not had a look at Aimia’s accounts, but I suspect that given that Nectar is a now owned by a offshore Canadian company, that a good chunk of £270m expenses goes towards paying interest on a loan (probably based in a tax haven), for the debt initially taken to acquire Nectar.

• Modern Day Sinbad says:

  28 Oct28 October 09:58

  Hotels.com has been a great program for me as I’m not loyal to any particular chain and earning rewards through Hotels.com has helped. I’ve not booked anything through their “sales” yet but I’m a big fan of their lowest price guarantee and have used it on a few occasions.

• Paul says:

  28 Oct28 October 09:22

  It’s very dodgy accounting if redemptions result in Nectar profitability falling. As soon as a point is issued, they have a liability for its eventual redemption and they should be recording that liability. Nectar make their money from the issue of points. Presumably they charge Sainsburys. eBay and other issuers more than the 0.5p/point ‘face’ redemption value.

  The point about encouraging people to redeem is to remind them that the points are worth collecting. If people never redeem, they stop bothering to collect and the owners of Nectar make less money from selling points to retailers.

  • Rob says:

    28 Oct28 October 09:49

    I am guessing that they take a certain percentage as ‘never going to be spent’ and immediately booked that as profit. If the percentage of redeemed points went up then they would need to claw back some of that money, from an accounting perspective.

    • Sussex Bantam says:

      28 Oct28 October 16:26

      Indeed – that’s exactly what they will do.

      In fact, as was discussed on the pay.com thread, the fact that significantly less than 100% of issued points will be redeemed is largely what drives this and other gift card business models.

• Kathy says:

  28 Oct28 October 11:05

  The thing about Nectar points is that you generally earn them so slowly, and their value is so small, that you just ignore them until you have a decent enough amount to bother redeeming. Their accounts should allow for the fact that they’ll be ‘saved up’ for a long time before being spent. they have had some half-decent redemption offers in the last 6 months, too, so that will have made some people redeem who had been ignoring them.

• David Ottley says:

  28 Oct28 October 11:47

  Nectar are not the only ones losing money – their customers are too. 21,000 points worth £105 disappeared from my Nectar account a few weeks back, allegedly spent at Argos in Balham. I was in Dover all the day this occurred and my card was with me. Nectar report that there is a scam cloning Nectar cards in Argos and that Argos and the Police are investigating. Meantime I have to wait 28 days while Argos decide if the loss from my account fits the scam profile before deciding if to reinstate my points. Meantime I am the loser. It appears that Nectar needs to improve card security to reduce such losses adding to it’s deficit, and to reduce Customer anger.

  • Chris says:

    28 Oct28 October 12:51

    I had something similar and Nectar would do nothing about it other than re-issue a new card/account number to stop the cloned card. Mine were redeemed at a Homebase in Northern Ireland when I live in the North East of England. Hope you get yours back as they wouldn’t budge with me. I lost £40 worth.

    • JQ says:

      28 Oct28 October 14:21

      That’s why I use them as soon as I get £2.50 worth.

      • Brian says:

        28 Oct28 October 16:08

        Quite. What is the advantage of keeping Nectar points? It’s not as though a conversion bonus might be around the corner, as with Clubcard. Since you rarely if ever get more than 0.5p per point, you might as well just use them as you earn them at Sainsbury’s, maybe keeping a few in reserve for Pizza Express/Caffe Nero etc – but certainly not 40 or 105 pounds worth.

        • Sussex Bantam says:

          28 Oct28 October 16:27

          Useful for the EBay promotions – IIRC I’ve made about £100 from those recently.

        • David says:

          28 Oct28 October 19:26

          In response to queries as to why I let them build up, I use them to pay for Easyjet flights for weekends away with the wife. I will obviously rethink my strategy in the future.

• The_Real_A says:

  28 Oct28 October 12:59

  And i beleive all Premium Economy Fares can be upgraded with Avios…

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