Fuel Rewards Programs: Are They Really Worth It?
If you live in an area where grocery stores offer discounts on fill-ups at their gas station based off your purchases at the store, you probably feel like you’re inundated with advertising about it.
They tout it as the best way to save money off your fuel purchases and try to entice you to spend as much as you can at their store because, after all, you’ll be saving money at the pump.
But the question is — is it really worth it?
Well, yes and no. It definitely can be if you’re already making purchases at that store and are comfortable with the amount you’re spending. The problem is when you see that you need to spend $15 more to get an extra ten cents off your fuel purchase, so you spend $15 on whatever you see just to get the fuel discount. That’s pretty pointless if you could have paid less for your purchase at another store. Remember, an extra ten cents off per gallon is only a $1.50 to $2.00 discount — certainly not worth wasting money you didn’t need to spend!
Another big promotion these stores usually run is related to gift cards. Sometimes if you purchase a gift card at their store (typically available for a variety of merchants), they’ll give you double the fuel discount.
Let’s think that through. Say you’ll earn 20 cents off per gallon for every $50 gift card purchase you make. Assuming your tank holds 16 gallons, that’s a $3.20 discount. If you already need a gift card (maybe for a gift), that seems like a good deal — you make $3.20 for really doing nothing.
If you don’t have a cash back credit card (such as Discover More), you can maximize this promotion by purchasing gift cards for all of the stores at which you shop. You’ll get fuel rewards essentially for shopping at the stores you already shop.
However, if you DO have a cash back credit card, it can get a bit more complicated. When you use a gift card you won’t be getting cash back rewards, so you have to take that into consideration. If your cash back card offers 5% cash back at grocery stores, buying a grocery store gift card is pointless. If you buy a $50 card, you’ll get a $3.20 fuel reward and a $2.50 cash back reward on your gift card purchase (assuming you use your cash back card to buy the gift card), but you’ll lose out on the $2.50 reward you’d get for using your cash back card on the subsequent $50 purchase.
However, if the gift card is in a category you only receive, say, 1% cash back on, then the gift card purchase can be worthwhile. You’ll get the fuel reward plus a $2.50 cash back reward because you’re buying the gift card at the grocery store. If you used your cash back card at the store only generating 1% cash back, you’d only receive a reward of 50 cents. In this case, you basically make $2. The question is if the whole process is worth the $2 you gain.
As you can see, there are winning and losing scenarios with fuel rewards programs. You just have to make the decision of when it’s worth it and when it’s not.
Fuel Rewards Program links:
Kroger family of stores (includes Kroger, Ralphs, Fry’s, Smith’s, and more)
