Personal-Finance

Are you getting a good deal with Discovery miles?

2020-02-06 13:00

Last month, Discovery announced the introduction of a new e-currency in the form of Discovery Miles, for its “universe” of banking, health and insurance products. Discovery claims that the new rewards system will give consumers more spending power than before.

This is because they can accumulate them across the various Discovery products. There are also more partners to redeem the miles as well as the ability to exchange them for cash. But is the system fair and are customers happy with it?

WHY THE CHANGE?

Dinesh Govender, Discovery Vitality CEO, claims that the hype over Discovery Miles offered on the credit card is what fanned the idea to roll it across its products. While Vitality has been successful in many respects and incentivised customers to exercise more, he believes that behaviour has changed, and customers now suffer from “smoothie fatigue”.

He explains: “If I offered a coffee in 1990 the odds of customers wanting the same this year will be lower – you’ll get bored of it.”

But one commentator, who preferred not to be named, pointed out that rewards schemes are often changed to improve a business’ commercial model.

“The reason they change is that they are not making money or its costing too much to maintain. If you change them then customers don’t use them as much. You can then generate more animosity but these programmes would go out of business if every one of us redeemed our points.”

An example of this is Momentum’s reward programme Multiply, which this year dropped Takealot as a partner. Top-tier members earned significant discounts and that was a drawcard for the programme.

Multiply clearly felt differently about offering free coffees as this year, for the first time, it has introduced vouchers for Wimpy coffee based on your weekly physical activity.

HOW DOES IT NOW WORK?

Discovery Miles can be spent on things such as coffee, smoothies, gifts, gadgets and travel rewards.

Govender explains: “With Discovery Miles you can still earn in the same way through personal health, saving money and good driving goals.

“The miles are also easier to spend and to retain. While rewards expired in 12 weeks, miles are valid for five years.”

Users of the app can also earn more points once a weekly 100-point goal is reached through Discovery’s game-board.

“It’s like a lottery system,” says Govender. “But you always win at least 50 points and up to 150 points.”

Discovery is also set to introduce Vitality Active Rewards for children and teenagers.

The company said that children will be able to look forward to “interacting with various age-appropriate health and fitness activities” and “earn their own Discovery Miles for moving more, understanding their health and eating more healthily”.

WHY ARE SOME UNHAPPY?

Many customers are dissatisfied and complaints vary.

Some people on social media accused the financial services institution of diluting its offering, saying only customers who took out all Discovery products could benefit from the system. There was a general feeling that the new system design is to encourage the use of Discovery Bank. There were complaints surrounding the complexity and duration of earning points.

Arthur Goldstuck, head of technology research firm World Wide Worx, concurs with users who feel it’s hard to understand. “The system is made complicated by having numerous elements, levels and terms as well as the complexity of navigating both the website and the app. “Little attempt is made to differentiate between rewards and reward status, which have now been separated quite aggressively but without communicating this separation effectively. The system obviously makes sense to those who devised it, but it is poorly communicated to users of the system.”

Meanwhile, one reader complained that the purchase of vouchers costs more using Discovery Miles than they did under the rewards system. She also complained that lots of healthy food purchases from Pick n Pay have fallen through the cracks.

However, Govender maintains that most of the problems have been related to Discovery Miles being exchanged or used with new partners, such as Makro and Uber. He adds: “Individual issues with Makro and Uber have cropped up from time to time.

“But we encourage customers who’ve had any issues with Discovery Miles to contact us via email or our helplines and we’ll resolve it.”

South Africans have become big users of reward programmes which, if used properly, can be hugely beneficial. But as the true costs of the rewards are understood by the company, cuts are often made.

Or to be more cynical, some offers are just there to increase membership and then eventually cut back. There also seems to be a move away from just behaviour-based rewards, to product sales.

Vitality is not the only programme receiving criticism. FNB’s eBucks requires more product ownership – such as life cover – to increase tier levels.

If you are going to join a rewards programme, especially one you must pay for, make sure you understand how it works and make sure that your normal behaviour will be sufficient to earn rewards.

If the progamme works on a tier system, make sure you understand what activities or products you need to have in order to make it worthwhile.

Also check if their partners are places where you normally shop. There is no point getting a free Wimpy coffee if you are seldom near a Wimpy.


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February 23 2020