Wednesday, March 14, 2018

Aeroplan and Esso to split as the latter joins forces with PC Optimum

Late on Monday night news came out that the relationship between Esso and Aeroplan was coming to end on May 31 (Thanks to Anshul at PointsMilesandBling for the heads up) Following that, yesterday morning further news came out that Esso was partnering with Loblaw's PC Optimum program. Of course for Aeroplan members this isn't good news while it is, of course, for PC Optimum points collectors. This change couldn't come at a worse time for Aeroplan - they have lost many big merchant partners over the years from Sobeys to Rexall to Uniprix to Hertz (although the last one was due to an exclusive offer with Avis Budget) and while the mileage earning at Esso wasn't extravagant, nor was the partnership a financial boon for Aeroplan, it was part of the bigger picture of a coalition program in that you earn a little here, a little there and it all adds up in the end thanks to having so many partners. Now add into the mix the break up from Air Canada and Star Alliance in a little over 2 years and what do you have left? Not much. So we here at Rewards Canada really hope Aeroplan has something up their sleeve that they haven't revealed yet. We have always stated that they have had great relationships with airlines like United, Lufthansa and other Star Alliance carriers so that there could be a likelihood some of them will become partners with Aeroplan post July-2020 but if you don't have many places to earn miles what does the program become? Well, effectively, it becomes a credit card reward program and if that's the case Aeroplan will really need to up their game to compete better with all the other proprietary credit card programs. Granted, this is two years down the road and pure speculation on our part but as we stand today, without any good news from Aeroplan, that's the way the program is heading and the space they are in just got more competitive.

How so you may ask?

Well with PC Optimum partnering with Esso, they have just put their feet into the coalition program waters. No longer is the program strictly Loblaw. With the recent amalgamation of the Shoppers Optimum program and the Loblaw PC Plus program you have a new giant to contend with and this giant has deep pockets. In fact, unlike Aeroplan and AIR MILES who are in the business of collecting data and selling miles, Loblaw has major businesses that can generate the revenues they need and they can use the PC Optimum program as a loss leader. That is they can sell PC Optimum points to potential partner merchants for a lot less than Aeroplan and AIR MILES are accustomed to. Think about it, Loblaw sells points cheap to Esso and PC Optimum members eat them up then redeem them at Loblaw or Shoppers Drug Mart locations - typically with purchases that are more than the points being redeemed so the company is still generating revenue. It is a great business move from the folks at Loblaw.

The new partnership between PC Optimum and Esso sees PC Optimum members earning 10 points per litre purchased at Esso, for most purchases that equates to less than a 1% return and they will also earn 10 points per dollar on eligible convenience store or car wash services at Esso stations. The latter of course equates to a 1% return. These earn rates are pretty much equivalent to what Esso Extra and Petro-Points offer albeit Petro-Points has accelerators for tying in cards like HBC, RBC as well as some others and you can also double dip if you link your More Rewards card to your Petro-Points cards. For me personally, the Petro-Points route is the most rewarding for gas, lotto and convenience store purchases. Prior to this announcement I would bounce between Esso and Petro but will most likely move all of my gas purchases to Petro-Canada.

Of course you don't have to go with PC Optimum points at Esso, you can still choose to earn Esso Extra points which are decent for those who frequent Esso. However if you shop even only so often at Shoppers Drug Mart and/or Loblaw stores you are probably better off choosing to earn PC Optimum points at Esso.

Overall though, for most Rewards Canada readers I would say this is not good news as I know many people used Esso as a place to boost their balances or keep their Aeroplan accounts active.  This was a good place for those infrequent Aeroplan users or people from out of the country traveling to Canada to keep Aeroplan miles alive.

Learn more about the Esso and Aeroplan split here.

What do you all think? Are you happy about the news? Upset? Indifferent as you don't use Esso?

No comments:

Post a Comment