This article is looking at the two largest loyalty schemes from a supermarket perspective. How much will you need to spend in-store to gain meaningful rewards.
Prior to 11 April 2015 when Sainsbury's halves Nectar earnings both the Clubcard and Nectar schemes seemed very similar:
Tesco's base earning is 1 point for every pound. Each Tesco Clubcard point is worth 1p at base value meaning you earn 1p for every pound spent.
Until 11 April 2015 you earned 2 Nectar points for every pound, but each Nectar point is only worth half a pence base value so you were still only earning 1p for every pound spent. However from 11 April 2015 is rate is halved meaning you only earn 1p for every £2 spent.
Even though they sounded similar, savvy points collectors have always been significantly better off with Clubcard (due to the amount of bonuses they run), now with Sainsbury's halving their points earning rate everyone will be at least twice as well off under Clubcard.
Let's compare the schemes:
UK Rail Travel
Nectar is a partner with Virgin Trains East Coast for spending on rail travel (you currently can only earn, but not spend on Virgin Trains (West Coast) or First Group) and Tesco Clubcard is a partner of redspottedhanky.com. Unfortunately you can't earn Clubcard points for booking rail travel but you can spend them.
The Tesco deal is that £5 of Clubcard points is worth £10 to spend (on any UK rail travel) at redspottedhanky.com. You can use multiple vouchers to increase the discount. Although redspottedhanky has a £1 booking fee this is outweighed by the increased points value.
The Nectar deal is usually that £2.50 in Nectar points gets you £2.50 off Virgin Trains East Coast spend. The current special offer until 31 May is £2.50 in points will be worth £3.75 which is a brilliant deal by Nectar standards but as you can see is poor compared to Tesco.
Conclusion: from 11 April 2015 spending £500 in Sainsbury's will only earn you £2.50 of Nectar points and at best will be worth £3.75 on rail travel. Spending £500 in Tesco will get you £5 of Clubcard points worth £10 on rail travel. Clubcard wins.
A common use for supermarket loyalty points is to spend them on eating out. You normally get a better than face value amount for using your points this way. Please note: this may not be the best value as you usually can't combine these vouchers with other special offers the restaurant is running and many of the big chains run regular promotions.
If you do decide that eating out is the best use of points you'll again be better off with Tesco Clubcard. Currently £2.50 in Clubcard points is worth £10 (4x value) in most participating restaurants. This includes most of the big chains that participate in these schemes such as Pizza Express and well as even a few local restaurants.
Nectar on the other hand has fewer partners, I can only see Pizza Express when I did a search this time, although there was more last time I checked so I'm not sure if it's a glitch or the other chains have left. As typical the Nectar rate is poor by comparison. £2.50 in Nectar points only gets you £3.75 off at Pizza Express.
Conclusion: even before the Nectar develuation Tesco Clubcard was the clear winner. £250 spend at Tesco would get you £10 at participating restaurants. At Sainsbury's after 11 April you'll need to spend £500 to get £3.75 off at participating restaurants. Clubcard wins.
Most of the days out offers by Tesco take the same form as the dining out offer. £2.50 in Clubcard points is worth £10 on days out. Some had special offers on ticket price, for example you could get a day ticket to Thorpe Park for £12.50 in Clubcard vouchers. The Nectar deal is that you use your card on the day and points are worth double. Adult on the day admission is currently £49.99 so you'd need £25 worth of Nectar points to take up this offer. From 11 April you'd need to spend £5000 at Sainsbury's for a day pass to Thorpe Park compared to just £1250 in Tesco.
If you want to join English Heritage and gain free admission to many historical sites you can get an annual membership for £16.50 in Clubcard vouchers (single) or £30 (joint). With Nectar you will need £40 of points for a single membership or £70.50 for a joint membership. This means for a single annual membership you need to spend £1650 in Tesco or £8000 in Sainsbury's (when earnings are halved from 11 April). Clubcard wins.
Flights and Holidays
Nectar has a number of partners including Expedia, Eurostar and easyJet however all they offer is the base rate of 500 points = £2.50 off. Whether you save £2.50 off your groceries or £2.50 off your flights it's still £2.50 saved and you'll be in the same financial position.
Tesco Clubcard on the other hand allows you to transfer points to both British Airways (250 Clubcard points = 600 BA Avios) and Virgin Atlantic (250 Clubcard points = 625 Virgin Flying Club miles) at very generous rates. You can also book flights with Monarch where £10 Clubcard points will be worth £15 on flights.
For hotels Tesco have partnered with a number of chains and most give 3x value (i.e. £10 in Clubcard points is worth £30 at the hotel). For flights and holidays it's quite clear Clubcard wins.
As you can see Tesco Clubcard is clearly the most generous of the supermarket schemes while the Nectar scheme is getting devalued even further. If Virgin Trains East Coast had moved us to Tesco Clubcard rather than Nectar it would have lessened the blow somewhat although it's important to remember that East Coast Rewards was significantly more generous than both those schemes.
The offers listed here were checked on nectar.com and tesco.com on 4 April 2015 and are subject to change.