The new East Coast franchise has been awarded to a company consisting of Stagecoach (90%) and Virgin (10%). One of the first changes they announced is the loyalty scheme is changing from East Coast Rewards to Nectar.
How will this affect me?
If you buy your rail tickets through eastcoast.co.uk and have signed up to East Coast Rewards you have been unable to collect points since February 2015. They needed to be redeemed before 30 September 2015.
What is Nectar?
Nectar is supposedly the UK's largest loyalty programme and is most commonly associated with Sainsbury's but has a significant number of partners. A number of rail franchises have joined Nectar including Virgin Trains and the FirstGroup franchises.
More partners? More places to spend my rewards on. Surely that's much better?
Nectar.com shows 129 ways to spend your rewards points on. Unfortunately they're all poor deals. The usual conversion rate for Nectar points is 500 points = £2.50 value, the best we've seen is the value being doubled but even in that scenario it's really bad value.
If you spend £500 at eastcoast.co.uk you will earn 500 points (or 750 points if buying first class tickets). You can get a standard class ticket for 255 points or 460 points for first class.
If you spend £500 with most Nectar partners you will earn 1000 Nectar points - this is worth a whopping £5 off at any of the many Nectar partners. With Sainsbury's you'll only earn 500 points (worth £2.50)
What other catches are there?
If you redeem your vouchers at certain venues such as Pizza Express you'll get a better rate where 1000 points = £7.50, however you are not allowed to combine these vouchers with other special offers and places like Pizza Express are always running money off promotions so it's rare you'd actually benefit from this promotion.
The way Virgin operates the Nectar scheme means you will only be able to earn points on Virgin Trains East Coast travel. East Coast Rewards let you earn points with any rail tickets purchased through their site. This means as well as the points being worth less it'll also take longer to collect.
I only travel for business and my company pays for my travel. Does East Coast have any other partners?
As you'd expect East Coast had fewer partners than Nectar and using your points for East Coast travel was easily the best value, however, if you didn't want to use your tickets for rail travel even the other options were better than Nectar. A £10 M&S or House of Fraser voucher is 510 points which could be obtained with £510 worth or standard class spend or £340 in first class. To get £10 off in Sainsbury's you'd have to spend £1000.
If you have a high balance that you're struggling to use there was also the opportunity to order more expensive items such as cases of real ale or wine.
Any alternative to Nectar?
Virgin Trains East Coast will also allow you to earn Virgin Atlantic Flying Club miles which may be an interesting option if you already collect miles with Virgin Atlantic. If you don't fly Virgin Atlantic then this option will not benefit you unless you plan to travel with them in the future. They've started to close a significant number of routes recently so even if you've flown them in the past it's worth checking they still serve the destination you require.
Will service be identical to the West Coast?
Virgin Trains currently operate on the West Coast. That is a partnership of 51% Virgin and 49% Stagecoach, East Coast will be different as it has a significant Stagecoach majority (90%) although they're using the same name. Although I expect the services to be similar once settled down there may be some differences due to the different ownership structure.
Who's responsible for Virgin Trains East Coast?
David Horne is the MD of Virgin Trains East Coast. He previously worked for the Stagecoach franchise East Midlands Trains. His Twitter feed is here. By all means let him know what you think about the switch to Nectar but please no personal attacks. It's not a nice thing to do to anyone and hopefully he does a good job overall with running Virgin Trains East Coast even if we can't convince him to rethink the loyalty scheme.