In light of the recent news of Sobeys et al. moving from AIR MILES to Scene+ and my updating of the Rewards Canada review of the BMO AIR MILES World Elite Mastercard it became very apparent to me that BMO is going to have to revamp their portfolio of AIR MILES co-brand credit cards. In this post we’ll look at why I think these cards need to be updated and how the bank should update them.
Rewards Canada Revamp Series
During the course of 2021 we offered a series of posts on credit cards that Rewards Canada felt were due for a revamp, tweaking or overhaul. Those articles proved to be very popular and we are pleased to now continue it with a 2022 series on cards that are in need of a makeover! The first post in the 2022 series fell into our lap over the past few weeks thanks to some big news in the loyalty space in Canada. The cards we are going to look at in the first post of this year’s series that we feel are in need of a revamp/update overhaul are the BMO AIR MILES®† World Elite®* MasterCard®*, BMO AIR MILES®† MasterCard®* and the BMO AIR MILES®† World Elite®* Business Mastercard®*
For your reading pleasure here are the previous posts in the our 2021 Overhaul/Tweaking series:
- There is one very popular travel rewards credit card in Canada that is due for a major overhaul
- It’s time for American Express to tweak the venerable Gold Rewards Card
- Two of Canada’s best cash back credit cards are in desperate need of one small tweak
- It’s time for TD to update their TD First Class Travel Visa Infinite Card
Revamping the BMO AIR MILES cards
Although the BMO AIR MILES Mastercard cards have undergone a few revamps over the past few years, more than most other cards in Canada, they are going to need another refresh sooner than later. When I was updating the review of the BMO AIR MILES World Elite Mastercard in early June 2022 I thought to myself the bank really needs to take a second look at the card earn rates. I was primarily thinking of the accelerated earn rates with AIR MILES partners which, when compared to competing cards are very restrictive. Then with the latest news of Empire (Sobeys, Safeway etc.) leaving AIR MILES it moves those BMO AIR MILES credit card accelerated earn rates from very restrictive to severely restrictive! Thus the revamp focuses heavily on the earn rates as there is really no point in having one of these cards unless changes are made to them.
Currently three out of the four available BMO AIR MILES Mastercards provide accelerated earn rates for using the cards at select AIR MILES partners. Those earn rates are as such:
- BMO AIR MILES World Elite Mastercard: 3 Reward Miles per $12 spent
- BMO AIR MILES Mastercard: 3 Reward Miles per $25 spent
- BMO AIR MILES World Elite Business Mastercard: 4 Reward Miles per $12 spent
On the cover these earn rates look very attractive – and they are attractive earn rates but they are curtailed by where you can earn them. Even if the Empire family of stores weren’t leaving AIR MILES there aren’t a lot of day to day partners to earn these higher rates.
Here are four provincial examples of partners showing which partners you can earn the extra AIR MILES at:
Not taking into account the news from Empire, the cards only have 6 to 16 partners where you can receive accelerated earn rates. And if you take a closer look at many of them, they aren’t day to day or even week to week type of partners. How many Canadians are renting a car regularly? Not many, so you can easily strike the three car rental partners off the list. Now you are at 3 to 13 partners including Staples and Samsung. Great partner options to earn those extra miles but again the question has to be asked, how many Canadians shop on a regular basis at Staples and Samsung? Not many so now you are down to 1 to 11 partners across the board. Global Pet Foods? Sure lots of us have pets but Global doesn’t have the reach of so many other pet supply stores do and what about if you don’t have pets? Again, a limited use partner so scratch them off as a day to day accelerated option. Now you are at 1 to 10 partners that you could be earning those extra miles at on a day to day basis. That number is very limiting or as I put above, restrictive when compared to virtually all competing cards as they provide extra miles or points for entire categories. At this point I am already thinking the earn rates on the cards need a revamp!
But wait, now we have to take into account all of the Sobeys and other Empire stores leaving the program. From the examples above, that leaves B.C. with one day to day earning partner, Shell – and for many that’s not even day to day, it once a week (Same goes for Alberta, Saskatchewan and the Territories). Ontario has it slightly better at three – Shell, metro and Jean Coutu – and Jean Coutu is iffy as a day to day option but I’ll give it to them because I’m really feeling bad for these cards right now. Quebec has two, Manitoba has two and the Atlantic provinces they actually do a bit better with three to four partners and again I’m being generous.
I totally understand why they moved these cards to only provide these extra miles at AIR MILES partners not too long ago. It’s a similar reason as to why AIR MILES got rid of their famous gift card redemptions so many years ago. It’s all about keeping members and credit card holders loyal to the brands of the main program. It is truly about building consumer loyalty. And if we were talking about the AIR MILES of yesteryear I would say this is the way to go for these cards but we’re not. We’re talking about a program that has lost and is losing so many important partners that the BMO credit cards can’t rely on only providing accelerated earn at AIR MILES partners.
So what needs to be done? They need to go to general accelerated
earn rates for the cards or even a flat rate earn like they had before. By general accelerated earn rates I mean an overarching earn for categories such as grocery, dining, travel etc. This is what the American Express AIR MILES cards provide and what cards from pretty much all other programs provide. Then, to appease AIR MILES partners they could create a program much like Amex Offers or RBC Offers where more miles could be earned for using the cards at AIR MILES partners. Come out with new offers on a weekly or monthly basis and have card holders register for those offers. By having them register it will make them more conscientious of actually shopping at those partners. And if a card holder doesn’t register, well they don’t get the extra miles and BMO/AIR MILES keep a little extra change in their pocket.
The other option is to move these cards to a flat earn rate. This is what the BMO AIR MILES World Elite Mastercard used to offer, 1 mile for every $10 spent. It was so easy then but now with so many cards using accelerated earn rates as marketing tactics it may not be the right approach to attracting new clients.
Personally if I was BMO I’d go with general category accelerators and introduce BMO AIR MILES Offers (my take on Amex Offers and RBC Offers)
And I’ll quickly touch upon the base earn rates of the cards – they are extremely weak just like all of BMO’s cards these days but to keep this piece from being excruciatingly long let’s just say they should be increased.
For the no fee card and the business card, no real changes to the benefits would be required. For the World Elite Mastercard, the Onyx status is great and the Mastercard lounge access is also good albeit it would be nice for them to bring back some annual lounge access passes but I’m not hugely concerned with that. There is one tweak I would make to a tweak they are already making – if that makes sense!
In July 2022 the World Elite card’s flight discount benefit is reverting back to a 25% discount from 15% and from North America only back to worldwide. For some collectors this will be great, for others not so much as the 25% will be limited to one booking per year and capped with a maximum discount of 750 miles. The current 15% is available for an unlimited amount of bookings and not capped at all.
If BMO doesn’t fix the earn side of things for the World Elite card, actually, even if they do, I would think to keep the card appealing they need to improve on this discount. And by improve, I don’t mean bigger, keep it as 25% but offer it on more than one booking per year. I would offer it as an always on 25% discount but cap the number of miles that you can have discounted per booking at 750 miles and perhaps put an annual cap of 3,000 miles. This way members don’t have to be concerned about when they should use the discount or save the miles for one booking where they try to maximize the discount. By offering a less limiting 25% off it could encourage more bookings for the program.
For example, with the once per year 25% off discount a collector looking to book a flight between Regina and Toronto that might only be 1,200 miles may not end up booking through AIR MILES as they will save their miles and their 25% off for a flight redemption in hope of using them for a flight sometime in the future that will require more miles. So what does that collector do? They go buy the Regina to Toronto flight directly with Air Canada or WestJet or whomever and now AIR MILES has lost that booking and the associated commission. By offering an always on discount you’re going to encourage more redemptions which in turn creates happier members and it is so well known in the loyalty industry that those type of members are more engaged thereby making them more profitable for the program.
Wrapping it up
Unless AIR MILES can score some major new partners there is almost no reason to have a BMO AIR MILES card in their current form in your wallet. You can do so much better with other cards. The problem is, I don’t see AIR MILES adding any major new partners to fill the gaps left by so many past partners and now Sobeys. I did a media interview for Yahoo Finance and the question arose about who AIR MILES could add? And I couldn’t answer the question because not one major retailer that is coast to coast or has a large regional presence and can provide day to day earning popped into my mind. They all have their own programs or participate in competing programs. There just aren’t a lot of good options left for AIR MILES to add. So what does BMO have to do? Revamp the earn rates on these cards once again and move away from only providing extra miles on such a small selection of partners. While they’re at it it wouldn’t hurt to throw in a few extra benefits like a better discount offer on the World Elite card.