Nectar: not as sweet as it seems

Nectar: not as sweet as it seems

One of the advantages often cited for Nectar over East Coast Rewards is the wide range of partners giving you many opportunities to earn. In Rewards v Nectar we showed how long it would take to earn anything useful if you only spend on rail traveller, but surely Nectar would be better if you already fully embraced the scheme. If you shop at Sainsbury's, buy your fuel at BP, have the Nectar credit card and buy through e-stores, surely they extra Nectar points through rail travel would be the icing on the cake? Again it turns out whether you're a low or high spender on rail travel you'll be worse off under Nectar.

Click to jump to one of the following scenarios:

Low Rail Spender

This passenger spends an average of £50 a month on standard class rail travel.

Category Total Monthly Spend
East Coast Rail Spend £50
Sainsbury's Groceries £480
Fuel (BP or Sainsbury's) 80 litres
Nectar American Express Card £700
Other Nectar partners (e-stores, etc) £50

This is what you'd earn when East Coast Rewards:

Category Spend EC Rewards
Points
Nectar
Points
East Coast Rail Spend £50 50  
Sainsbury's Groceries £480   480
Fuel 80 litres @ £1.15/litre £92   80
Nectar American Express Card £700   1400
Other Nectar partners £50   100
TOTAL £1372 50 2060

This is what you'd earn without East Coast Rewards:

Category Spend Nectar Points
East Coast Rail Spend £50 100
Sainsbury's Groceries £480 480
Fuel 80 litres @ £1.15/litre £92 80
Nectar American Express Card £700 1400
Other Nectar partners £50 100
TOTAL £1522 2160

Over the year this would work out as:

  Nectar Points collected Value of Nectar Points EC Rewards Collected Value of EC Rewards
Total annual earnings with EC Rewards 24,720 £123.60 600 2x standard class
or 1x first class
Total annual earnings without EC Rewards 25,920 £129.60 N/A N/A

The additional Nectar points earned would be worth £6, with East Coast Rewards you would have earned two standard class or one first class tickets. What would you prefer two free tickets or £6 off your shopping?

Regular Leisure Traveller

This passenger spends an average of £200 a month on standard class travel. They take weekly trips on the East Coast route but book early enough to get the best fares.

Category Total Monthly Spend
East Coast Rail Spend £200
Sainsbury's Groceries £480
Fuel (BP or Sainsbury's) 100 litres
Nectar American Express Card £800
Other Nectar partners (e-stores, etc) £100

This is what you'd earn when East Coast Rewards:

Category Spend EC Rewards
Points
Nectar
Points
East Coast Rail Spend £200 200  
Sainsbury's Groceries £480   480
Fuel 100 litres @ £1.15/litre £115   100
Nectar American Express Card £800   1600
Other Nectar partners £100   200
TOTAL £1695 200 2380

This is what you'd earn without East Coast Rewards:

Category Spend Nectar Points
East Coast Rail Spend £200 400
Sainsbury's Groceries £480 480
Fuel 100 litres @ £1.15/litre £115 100
Nectar American Express Card £800 1600
Other Nectar partners £100 200
TOTAL £1695 2780

Over the year this would work out as:

  Nectar Points collected Value of Nectar Points EC Rewards Collected Value of EC Rewards
Total annual earnings with EC Rewards 28,560 £142.80 2400 10x standard class
or 5x first class
Total annual earnings without EC Rewards 33,360 £166.80 N/A N/A

The additional Nectar points earned would be worth £24, with East Coast Rewards you would have earned ten standard class or five first class tickets. What would you prefer ten free tickets or £24 off your shopping?

Regular Business Traveller

This passenger spends an average of £350 a month on standard class travel. They take weekly trips on the East Coast route but as they book at short notice have to pay higher fares, the company has a standard class only policy but allows employees to book their own tickets.

Category Total Monthly Spend
East Coast Rail Spend £350
Sainsbury's Groceries £480
Fuel (BP or Sainsbury's) 80 litres
Nectar American Express Card £800
Other Nectar partners (e-stores, etc) £100

This is what you'd earn when East Coast Rewards:

Category Spend EC Rewards
Points
Nectar
Points
East Coast Rail Spend £350 350  
Sainsbury's Groceries £480   480
Fuel 80 litres @ £1.15/litre £92   80
Nectar American Express Card £800   1600
Other Nectar partners £100   200
TOTAL £1822 350 2360

This is what you'd earn without East Coast Rewards:

Category Spend Nectar Points
East Coast Rail Spend £350 700
Sainsbury's Groceries £480 480
Fuel 80 litres @ £1.15/litre £92 80
Nectar American Express Card £800 1600
Other Nectar partners £100 200
TOTAL £1822 3060

Over the year this would work out as:

  Nectar Points collected Value of Nectar Points EC Rewards Collected Value of EC Rewards
Total annual earnings with EC Rewards 28,320 £141.60 4200 18x standard class
or 10x first class
Total annual earnings without EC Rewards 36,720 £183.60 N/A N/A

The additional Nectar points earned would be worth £42, with East Coast Rewards you would have earned 18 standard class or 10 first class tickets. Ten free first class tickets would be worth a lot more than £42 extra you'd earn with Nectar. In fact the total earned with all your spending wouldn't even cover the cost of four first class tickets with Nectar.

Premium Leisure Traveller

This passenger spends an average of £300 a month on first class travel. They take weekly trips on the East Coast route but always look for the best value first class advance fares.

Category Total Monthly Spend
East Coast Rail Spend (first class) £300
Sainsbury's Groceries £500
Fuel (BP or Sainsbury's) 100 litres
Nectar American Express Card £1000
Other Nectar partners (e-stores, etc) £150

This is what you'd earn when East Coast Rewards:

Category Spend EC Rewards
Points
Nectar
Points
East Coast Rail Spend (1st class) £300 450  
Sainsbury's Groceries £500   500
Fuel 100 litres @ £1.15/litre £115   100
Nectar American Express Card £1000   2000
Other Nectar partners £150   300
TOTAL £2065 450 2900

This is what you'd earn without East Coast Rewards:

Category Spend Nectar Points
East Coast Rail Spend £300 600
Sainsbury's Groceries £500 500
Fuel 100 litres @ £1.15/litre £115 100
Nectar American Express Card £1000 2000
Other Nectar partners £150 300
TOTAL £2065 3500

Over the year this would work out as:

  Nectar Points collected Value of Nectar Points EC Rewards Collected Value of EC Rewards
Total annual earnings with EC Rewards 34,800 £174.00 5400 23x standard class
or 13x first class
Total annual earnings without EC Rewards 42,000 £210.00 N/A N/A

The additional Nectar points earned would be worth £36, with East Coast Rewards you would have earned 23 standard class or 13 first class tickets. 

Premium Business Traveller

This passenger spends an average of £600 a month on first class travel. They take regular business trips on the East Coast route where the travel policy is first class with flexible tickets. To earn additional points they pay their business expenses on their American Express card and claim it back.

Category Total Monthly Spend
East Coast Rail Spend (first class) £600
Sainsbury's Groceries £420
Fuel (BP or Sainsbury's) 80 litres
Nectar American Express Card £2000
Other Nectar partners (e-stores, etc) £75

This is what you'd earn when East Coast Rewards:

Category Spend EC Rewards
Points
Nectar
Points
East Coast Rail Spend (1st class) £600 900  
Sainsbury's Groceries £420   420
Fuel 80 litres @ £1.15/litre £92   80
Nectar American Express Card £2000   4000
Other Nectar partners £75   150
TOTAL £3187 900 4650

This is what you'd earn without East Coast Rewards:

Category Spend Nectar Points
East Coast Rail Spend £600 1200
Sainsbury's Groceries £480 420
Fuel 80 litres @ £1.15/litre £92 80
Nectar American Express Card £2000 4000
Other Nectar partners £75 150
TOTAL £3187 5850

Over the year this would work out as:

  Nectar Points collected Value of Nectar Points EC Rewards Collected Value of EC Rewards
Total annual earnings with EC Rewards 55,800 £279.00 10,800 46x standard class
or 27x first class
Total annual earnings without EC Rewards 70,200 £351.00 N/A N/A

The additional Nectar points earned would be worth £72, with East Coast Rewards you would have earned 46 standard class or 27 first class tickets. There's no way that anyone could claim that Nectar is a worthy reward for their highest spenders.

Summary

If we consider the value of East Coast Rewards in all cases the value of the rewards earned are worth more than the Nectar points earned just on rail travel. The low rail travel spender is 8.3 times better off with East Coast Rewards and the premium business traveller is 18.75 times better off!

Even if we incorporate shopping, fuel, credit cards and other Nectar purchases then only the low rail spender will have their lost points made up for with other activity (of course if they spend their points on rail travel they can't spend them on something else). Every other scenario would be worth more with East Coast Rewards alone rather than using Nectar at its various partners.

  Low Spender Regular Leisure Regular Business Premium Leisure Premium Business
Total annual rail spend £600 £2400 £4200 £3600 £7200
Total annual other Nectar spend £15,864 £17,940 £17,664 £21,180 £31,044
Nectar earned on other items £123.60 £142.80 £141.60 £174.00 £279.00
Nectar earned on rail travel £6.00 £24.00 £42.00 £36.00 £72.00
Total Nectar rail + other £129.60 £166.80 £183.60 £210.00 £351.00
Value of EC Rewards earned £50.00 £250.00 £500.00 £575.00 £1350.00