It's not really news now as it was announced a few days ago but the new owners of Homebase have decided to pull out of the Nectar scheme at the end of the year. If they withdraw from the scheme successfully that could see others pull out too.

There's signs currently in stores saying that it will be no longer possible to earn or spend points in stores after 31 December 2016.

It does appear that Nectar is drifting towards being an online portal where most points are earned by clicking through to other retailers and they give you points based on affiliate fees they get from the online retailer. They no longer make a distinction between core Nectar partners such as Sainsbury's and BP and those that are just affiliate links to an online shop, originally these used to be in a separate Nectar eStores section.

Nectar has been slow to adopt technology, although they are always promoting their app there's officially no way to use your Nectar card on a smartphone although some 3rd party solutions exist they're unsupported and some stores have refused to accept these virtual cards. If you do use your Nectar card in store you'll often get a bunch of coupons. I find having to carry a physical card and deal with paper coupons to be a needless hassle when it can all be handled on your phone.

Nectar can't rely on eStores to make money, sites like Quidco and TopCashback give a much better deal for most online purchases and removing one of their major retailers from the scheme provides less incentive for people to carry their cards around.

Predictions:

  • BP will be the next retailer to leave the scheme. Reason: they directly compete with Sainsbury's filling stations and Sainsbury's have been running a number of 10x points promotions for fuel over the last year which means they're effectively promoting a competitor.
  • Virgin Trains East Coast will leave the scheme when their contract permits. Reason: although it has generated some new business it has alienated their highest spenders who were engaged with the previous rewards scheme.
  • Nectar will cease to exist in its current form by 2018, I suspect Sainsbury's will bring their loyalty scheme back in-house if there's few other partners for Nectar. If Nectar continues to exist as a separate entity to Sainsbury's it'll become online only.