Research shows that most people in SA belong to more than one programme, scoring cash or points and discounts on everything from travel to fuel, to healthy foods and activities, to washing powder

According to research firm AC Nielsen, SA has the highest penetration of loyalty programmes anywhere, with almost two-thirds of the population belonging to more than one programme.

There are two broad categories of reward programmes in financial services. One is rewards for doing business, which would apply to all the bank programmes.

FNB’s eBucks has been the most successful of these (the eBuck itself was an online currency long before anyone had thought of bitcoin). The other bank programmes — Nedbank’s Greenbacks, Absa’s Rewards and Standard Bank’s UCount — have similar methodologies to eBucks.

Then there are the wellness programmes, which were pioneered in SA. Discovery Vitality is dominant in this sector, with Momentum Multiply in a respectable second place. They both encourage fitness, particularly through discounted gym membership.

Johan Moolman, head of eBucks, says the programme has paid out more than R10bn in its 18-year history.

Customers can spend these rewards on regular purchases such as groceries, fuel and airtime, or they can save them for Christmas gifts or travel,

To stay competitive the number of points needed to move to a higher level has reduced. The ability to accrue eBucks at level 5 is quite substantial, with a 3% accrual on credit card payments, 0.25% on cheque cards, and 15% discounts at Shoprite/Checkers, Gautrain and Uber, the airtime provider FNB Connect and even on FNB Life Cover.

Absa Rewards differs from eBucks in that it pays cash rather than a phantom currency. Head of Absa Rewards Sonja Fourie says Absa’s experience shows that it drives engagement. "Many loyalty programmes are engineered with an overriding goal to drive deals with partners. We need a shift so that programmes are engineered to drive value for the customer and provide the customer with a choice of where to use the rewards."

Fayelizabeth Foster, the executive head of loyalty and rewards at Standard Bank, disagrees. She was one of the founders of Absa Rewards, but when she was hired to start Standard’s UCount programme five years ago she took a different approach.

"Just giving cash which then gets swallowed up by the monthly bills isn’t the best way to build up loyalty. It is better when a rewards programme gives you something specific that is important to you."

This could mean a bucket-list holiday, or for example the opportunity to participate in crowd-funding for students.

Nedbank Greenbacks has been successful at encouraging its clients to use their points to buy unit trusts.

It enhances the value of Greenbacks by more than 20% for those who choose to buy unit trusts instead of goods.

The bank programmes do not have the paternalistic approach of Vitality which, for example, only gives discounts at Woolworths and Pick n Pay when it comes to paying for healthy foods.

Foster says UCount is more concerned about helping its clients through the month and pays back up to 20% of the shopping baskets at Pick n Pay, Woolworths and Clicks. It includes nonfood items such as shampoo and washing powder.

It even has KFC as a partner as it believes that a monthly family treat is valuable for many of its clients.

Unlike its main competitors, UCount points expire after five years. Foster believes this boosts engagement as it forces customers to make an active choice about what to do with their rewards, as they don’t accumulate indefinitely.

Setting up these programmes is complex, time-consuming and expensive and it does not work for everyone.

In March 2017 Liberty cancelled its Own Your Life rewards programme. It was no longer considered to be aligned to Liberty’s strategic direction, with its focus on nice-to-haves such as car hire, accommodation and flight bookings.

Old Mutual has been conspicuous by its absence from rewards programmes, but Jean Minnaar, GM for customer solutions, says the new Old Mutual Rewards programme is being rolled out to staff. It is designed to encourage good financial habits: taking control of finances and working towards financial goals. It will be available even to people who do not own an Old Mutual product though, of course, the group plans to build up enough goodwill to win them over.

In contrast, its rival, Sanlam Reality, encourages people to take out as many products as possible from the life office and its strategic partners, such as Santam and Bonitas medical aid. Ultimately, these programmes would not be worthwhile if they did not add new business.