New at some brick-and-mortar stores: Pay with your points
Yes, it's convenient, but you get less for your points with merchandise
By Tony Mecia | Published: June 6, 2017
Dear Cashing In,
I used my American Express card at Rite Aid the other day and was surprised when the card reader asked if I wanted to use my American Express Membership Rewards for the purchase. Is this a good idea? – Drew
Coming soon to a check-out counter near you: a chance to use your credit card rewards.
In November 2016, Rite Aid announced that it was the first pharmacy chain in the country to accept American Express rewards for purchases. That’s a pretty good technological feat, having Rite Aid’s and American Express’s computer systems work in harmony and being able to apply your reward points instantly at the register.
But it’s part of a larger trend toward making your reward points easier to use, on all kinds of different items, even when you’re on the go. There is a growing number of those kinds of partnerships out there making it easier for you to use your points easily in places you might not expect. For example, Amazon has partnerships with Chase, American Express, Citi and Discover that allow you to link your card and pay with points. Uber and Airbnb also allow you to pay with American Express points.
In addition, there are many different companies offering “mobile wallets,” which allow you to pay, earn reward points and redeem points using your smartphone.
All of those other examples, of course, tend to be Internet-based services. What makes the Rite Aid purchases different is that it is at brick-and-mortar stores and is linked directly to your credit card – no smartphone or loyalty program required.
Separately, American Express, Rite Aid, Macy’s and other retailers are all part of a reward program called Plenti, in which you can pool points from different participating stores to redeem at any of the participants. But that’s a separate process than just using your American Express Membership Rewards when you’re paying at Rite Aid.
I checked this out recently and headed to a nearby Rite Aid with my American Express card. I went in, picked out some mints and went to the register. I inserted the card, and the terminal recognized me and asked if instead of paying $2.56, I would like to use 366 Membership Rewards points. It also gave me my account balance, 86,552 points. I clicked “no thanks.”
When I did that, the cashier told me most people punch “no.” “Who’s going to want to use their reward points at a drugstore?” she said.
Just because you have the ability to use points for purchases doesn’t mean that you should. In this case, the Membership Rewards points at Rite Aid are worth 0.7 cents each. That’s not very much. There are better uses of American Express points that offer more value. Typically, travel expenses can offer the best values. Merchandise tends to offer the worst values.
Of course, if you have points to burn – so many that you don’t know how you will use them – then sure, go ahead and pay with points. Personally, I’m going to save my points for something more valuable than a pack of mints.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
- Options for business cash back cards – If you're signing up for a business cash back card, you have a lot of options. Be sure to calculate ahead of time which kind of cash-back deal can give you the most rewards ...
- Beware of checks sent with your card statement – If you receive convenient checks with your card statement, you might be tempted to use them, hoping to get rewards. Not only will you get no points for using these checks, but you could end up paying high fees ...
- Using rewards to fly first class – If you want to use your points to upgrade your seat category on a flight, it could still cost you money ...