BMO Air Miles Cards: Earn More Rewards on Groceries

I’ve covered the Scene+ vs. Air Miles saga for the past month now, and it never seems to get any less boring.

First Sobeys dumped the Air Miles program with a ruthlessness reminiscent of Game of Thrones. Then Staples decided to jump ship off what they must have perceived as a boat dangerously close to the water level soon thereafter.

And then if that wasn’t enough, Scotiabank decided to flip the hyperdrive switch on their co-branded Scene+ Amex cards.

Air Miles needs a turnaround strategy, a cunning plan that belies cunning and ingenuity in the face of looming disaster.

What they’ve just announced ain’t it.

BMO Credit Cards: Earn 2x Air Miles on Groceries

Starting August 1, 2022, BMO co-branded Air Miles Mastercards will earn double the points on all non-affiliated grocery store purchases.

That means 2 Air Miles per $12 spent on the BMO Air Miles World Elite Mastercard and 2 Air Miles per $25 spent on the BMO Air Miles Mastercard.

Meanwhile, shopping at their affiliated Sobeys stores will continue to earn 3x rewards – for now.

Cash Miles have a fixed value of 10.5 cents per Air Mile. On the World Elite card, that works out to a rate of return of 1.75% per dollar spent.

For a fixed-value currency, that’s not much at all for a premium credit card, paling in comparison to 5x+ rates offered by competitors’ credit cards (including BMO’s own eclipse Visa cards!).

So, while this is an objectively positive move, we as consumers have to ask: why bother?

Air Miles: Asleep in the Cockpit

Air Miles keeps on losing retail partners. It isn’t just Sobeys and Staples that have left; other long-time comrades such as the Lowe’s and its associated hardware stores deplaned long ago in 2021.

On top of this, the redemption side of Air Miles has continued to worsen. The best use of these points is on Cash Miles because of how useless Dream Miles have become for aspirational travel.

To add to the trifecta of misfortune is the fact that Air Miles is now left with only one major Big 5 bank backing them: the Bank of Montreal. And with what we’ve seen of their credit card “innovations,” is this really the most viable financial institution to orchestrate the embattled program’s turnaround?

Overall, the viability of the entire program, both on the accumulation and redemption sides, has taken a serious nosedive, with no end in sight.

Contrasting these weaknesses have been the strengths of the Scene+ program, which is no longer just for movie tickets like the program of our erstwhile youths was.

If you have a Scotiabank Scene+ co-branded credit card such as their Scotiabank Gold American Express Card, travel can be redeemed easily through their app or online web portal at a flat rate of 1 cent per point. This works both on travel purchases you charge directly to your card, as well as to bookings made through Scotiabank’s in-house travel agency.

Air Miles’s and BMO’s response to this situation? They’ve decided to take a swipe at Scotiabank’s upcoming 6x earn rate at Sobeys grocery stores.

That’s it. That’s their entire response. No other accelerated earn rates, no partners, no incentives on redemptions to try and get customers to burn liabilities off the Air Miles’s parent company’s books.

What’s more, with the Scene+ cards adding a bonus for shopping at their affiliated Sobeys stores on top of their already-strong grocery accelerators, I wouldn’t be surprised to see the Air Miles cards lose their 3x earn rate once the Sobeys partnership has officially been sunsetted. That would leave these cards earning 2x Air Miles at all grocery stores… and not a whole lot more anywhere else.

I can’t see the vast majority of consumers changing their shopping habits to remain loyal to Air Miles, when they could simply change their credit card provider instead. The latter is much less of an inconvenience, all it takes is for them to see the writing on the wall.

Methinks the battle between the two loyalty programs will end the following way:

Is Air Miles in a Death Spiral?

In business, as in love and war, all is fair.

That being said, this move by Air Miles and LoyaltyOne (Air Miles’s parent company) feels downright desperate, an attempt to inject much-needed life into the ailing program and distract from its loss of partners by permitting one to earn more points at non-affiliated grocery partners.

If this is only a first step, then that is to be applauded. I hope that there will be more attempts to rejuvenate Air Miles by increasing earn rates and eventually returning redemptions to a better position. 

After all, this is still business. Air Miles both needs to make money from its program, and try to return positive returns to its shareholders. Right now, they’ve appeared to try and survive their loss of partnerships by cutting redemptions. This has, at least to the casual observer, caused fewer people to bother collecting Air Miles at all.

This, in turn, makes the program seem less appealing as a method of driving loyalty to participating brands, who cut ties with Air Miles, who then have to cut the value of redemptions, and so goes the cycle goes on, round after round to the present situation…

It would be good if this assessment was proven wrong by the march of history but thus far it feels Air Miles is flying along this trajectory to an unpleasant destination.

Conclusion

Are we witnessing the demise of Air Miles as it lurches further into unprofitability? Is Scene+ going to continue to dole out aggressive incentives to poach customers?

It’s hard to interpret a reality in which this one minor positive change – the doubled earning rates on BMO Air Miles Mastercards for non-affiliated grocery stores – will reverse the fortunes of Air Miles and LoyaltyOne.

This is a lesson that customers can’t be taken for granted: loyalty programs are best when they give legitimate rewards and are available for earning on a wide variety of categories or participating partners.

Until next time, be sure to load up on points when you’re out shopping for groceries.