Best supermarket loyalty cards: how do they work and what rewards do you get?

Supermarket loyalty cards could help families fight back against rising living costs and higher food bills. Here's how they work and the perks you could get.

Woman and two children doing a food shop with a trolley
(Image credit: Getty / Future)

Combining the use of a supermarket loyalty card at the cheapest supermarkets will save you money on food (opens in new tab) at a time when energy bills and other costs are soaring.

Brean Horne, a personal finance expert at Nerdwallet, told us: “Food prices have surged by more than 5%, the highest increase in a decade and may not fall any time soon. So saving money at the supermarket is more important than ever. Supermarket loyalty schemes can offer good deals and help you save money at the checkout.”

How do supermarket loyalty cards work?

Although there are variations depending on the scheme you, loyalty cards typically work in a similar way. Shoppers earn points each time they spend money in-store or online. Points can then be used to make purchases at that supermarket or other retailers that the store has teamed up with. For example, if you save up enough Tesco points (opens in new tab) they can be used to buy Disney+ subscriptions, tickets to Alton Towers, and other adventures parks, and cinema tickets and passes.

Similarly, with a Sainsbury's (opens in new tab) Nectar card, you can collect and spend points at a number of retailers including Argos (opens in new tab), Esso, eBay (opens in new tab), Caffe Nero, Habitat (opens in new tab) and more.

And, of course, you'll also receive money-off vouchers (in the post or via the app) at the supermarket. As they say, a Tesco (opens in new tab) Clubcard also has 'the power to bring down prices' - simply presenting your card at the checkout will give you an instant saving. Keep a lookout for special ' Clubcard only offers in-store and online. Personal finance expert Brean Horne adds: “Once you earn enough points, you can use them to get money off of your shopping. Some loyalty schemes also offer tailored discounts on products that you’re likely to buy, based on your shopping habits.”

Ultimately, loyalty cards are a great source of data for supermarkets. Collecting data on this scale helps supermarkets to understand their customers' shopping habits and identify any buying trends. This data can be used to inform everything from which products to sell and in which stores, to improving customer service and tailoring marketing campaigns.

Are supermarket loyalty cards worth it?

The value of supermarket loyalty cards depends on where you shop, how much you spend and what rewards you are looking for. Someone spending £400 a month with Tesco Clubcard, for example, could earn £4 back each month. This could then be worth three times the value when redeemed at selected Tesco partners. For example, for every 50p you earn in Clubcard vouchers, you can get £1.50 off at Cineworld (on both tickets and snacks).

By contrast, a £400 monthly spend with a Sainsbury’s Nectar card would only earn you half of what you’d get at Tesco, at £2. But Nectar has the advantage of earning points at brands such as Esso, Argos and eBay, so if you regularly spend at these brands, you’ll earn points faster.

Pete Howroyd (opens in new tab), CEO and founder of loyalty app Swapi (opens in new tab) says: “Although imperfect and often lacking in innovation, loyalty systems in UK supermarkets can certainly save you money. If consumers have several supermarket choices locally they can start to leverage each one's benefits to suit their own shopping habits.”

Before you fill up your wallet with supermarket loyalty cards, however, there are a few caveats to note. Liz Edwards, editor-in-chief at Finder (opens in new tab), says: “The rule of thumb with supermarket loyalty cards is to get the card for where you’d normally be shopping anyway, rather than switch because of a loyalty scheme. If you’re shopping at a low-cost supermarket, switching to another chain to get a particular card is likely to be a false economy.

“In a similar vein, loyalty schemes are there to find out about you and your shopping habits, so some schemes will send you tailored offers with bonus points or discounts. These are always worth checking out but don’t be pushed into buying things just because of extra points - buy what you’d be getting anyway.”

The best supermarket loyalty cards

Here, we take a closer look at the best supermarket loyalty cards, assessing factors such as the best rewards, where rewards can be earned and redeemed, plus any additional perks.

Tesco Clubcard

What do you earn? Collect 1 point for every £1 you spend in-store and online at Tesco and 1 point for every £2 you spend on fuel at Tesco filling stations. You can also earn points if you have a Tesco mobile contract or a Tesco Bank credit card; you’ll earn 1 point for every £1 spent on your mobile phone bill and 1 point for every £4 spent on your credit card.

What can you use rewards for? For every 150 points, you’ll get £1.50 worth of vouchers that you can spend on groceries or fuel at Tesco. Alternatively, points can be worth up to three times more if you spend them with Tesco’s reward partners on days out, eating out, travel and more. Partners include English Heritage, Pizza Express and Eurotunnel.

How much do you earn on a £100 spend? £1

Additional benefits? Clubcard holders benefit from exclusive discounts on certain products in-store and online. You can request Clubcard vouchers within 24 hours via the Tesco Grocery and Clubcard app or via your online account.

Pros: You can make some significant savings on days out and activities.
Cons: Clubcard vouchers expire after two years and cannot be reissued.

Sainsbury's Nectar Card

What do you earn? Shoppers earn 1 point for every £1 spent at Sainsbury’s in-store and online, and 1 point for every £1 spent on Sainsbury’s fuel. You can also collect points at partner brands including Argos, Esso and eBay.

What can you use rewards for? You can redeem Nectar points in-store, either at Sainsbury’s or at partner brands, which means options are a little more limited compared to Tesco Clubcard. Each 500 points earned is worth £2.50 at Sainsbury’s, eBay, and Argos. You can also exchange 400 Nectar points for 250 Avios.

How much do you earn on a £100 spend? 50p

Additional benefits? You can earn an extra 200 points each month by downloading the Nectar Yahoo Toolbar and using it for your online searches. Newly-launched My Nectar Prices offers discounts tailored to your shopping habits if you use the SmartShop app or handsets.

Pros: Option to collect and spend points at brand partners.

Cons: Can take a long time to build up points.

Co-op Membership

What do you earn? For every £1 spent on selected Co-op (opens in new tab) products and services, 2p will go into your Co-op Membership account. The same amount also goes to support community organisations and local causes.

What can you use rewards for? You can use your rewards on most things you buy, not just Co-op products. You can also choose to donate them.

How much do you earn on a £100 spend? £2

Additional benefits? You’ll receive special offers based on what you like to buy, plus exclusive member deals, as well as discounts on Co-op services such as insurance, funeral care and legal services.

Pros: Flexibility on where you spend rewards.

Cons: Not points-based and costs £1 to join.

Iceland Bonus Card

What do you earn? Cardholders earn rewards by saving up shopping money in advance. For every £20 saved, you’ll receive an extra £1.

What can you use rewards for? Rewards are paid into your account which you can then use along with your saved cash to pay for shopping at Iceland (opens in new tab) and The Food Warehouse.

How much do you earn on a £100 spend? £5

Additional benefits? Your Bonus card will give you exclusive offers in-store and online, free home delivery when you spend £25 or more in-store, and the chance to win prizes.

Pros: Easy way to budget for your food shop.

Cons: Not point-based.

myWaitrose Membership

What do you earn? Rather than earning points, with this loyalty scheme from Waitrose (opens in new tab) you get personalised vouchers each week. You can also benefit from members-only pricing on a selection of products.

What can you use rewards for? Each week, you will be sent personalised vouchers which can be used for money off on selected items.

Additional benefits? You can get 5% off dry cleaning and laundry by showing your myWaitrose card when using in-store Johnsons the Cleaners services. Cardholders will also get free Waitrose Food and Waitrose Heath magazines. Any myWaitrose members who also have a Vitality health or life insurance plan can also benefit from 25% cashback on Waitrose products with the Good Health logo. Membership will also get you 10% off at Waitrose Cookery School.

Pros: Members-only pricing could see you make some nice savings on your weekly shop.

Cons: Not points-based.

Lidl Plus

What do you earn? Registering for the Lidl (opens in new tab) Plus rewards app gives you access to an array of exclusive discounts and prizes.

What can you use rewards for? You can use the reward coupons for money off your favourite products, or a free gift or money off when you reach certain spending targets. For example, spend £50 in a month and you'll get a coupon for a free in-store bakery item. Spend £100 in a month and you'll get a £2 off coupon. You'll get a £10 off coupon when you spend £200 in a month.

How much do you earn on a £100 spend? £2 (or £10 if you spend £200 in a month).

Additional benefits? Exclusive discounts and prizes from Lidl partners.

Pros: App-based, so you don't have to worry about forgetting your card.

Cons: Not point-based.

My Morrisons 

What do you earn? Personalised offers and discounts.

What can you use rewards for?  Use your personalised offers to cut the cost of your next food shop. Join one of the My Morrisons Clubs and you'll get access to exclusive discounts, helpful tips and members-only treats and competitions.

Additional benefits? Access to My Morrisons Clubs, for exclusive member benefits tailored towards NHS staff, teachers, students and new parents.

Pros: You can use the My Morrisons app or the Morrisons (opens in new tab) website to activate your rewards.

Cons: Not points-based.

Which other loyalty cards are worth considering?

The perks don't end with supermarket loyalty cards. If you regularly shop at Boots (opens in new tab), it can also be worth looking at the Boots Advantage card (opens in new tab) which gives you 4 points for every £1 you spend. Each point is worth 1p and you can redeem your points in-store at any time, as long as you have enough points to cover the cost of the item. For example, you’ll need 499 points to cover an item priced at £4.99.

Superdrug also offers a loyalty card which gives you 1 point for every £1 you spend. Like the Boots Advantage card, each point is worth 1p, but unlike Boots, you can use a combination of points and cash to pay for items.

Restaurants and coffee shops loyalty schemes

Restaurants and coffee shops are getting in on the loyalty card action too. If you are a regular Starbucks visitor, make sure you register for a Starbucks Card - you get three stars for every £1 you spend. Collect 150 stars and you can get a free drink, while 450 stars will get you extra shots of espresso, selected syrups and whipped cream. With 450 stars, you'll also reach Gold Level status, which means you'll get a free drink on your birthday.

Pret Perks work in a similar way. Earn stars as you shop, and with 10 stars, you can unlock a perk.

Costa Coffee also has a rewards programme, the Costa Club. As a member of the club, you'll earn a point (or bean) for every hot or cold crafted drink you buy. Collect eight beans and you can get a drink for free.  Better still, if you buy four drinks in a reusable cup, you'll get your fifth for free. You'll also get free cake on your birthday.

If you are a regular frequenter of Nando's, it's definitely worth signing up for a Nando's card. You can earn a point (or chilli) for every £7 spend online or in the restaurant. Three chillis will unlock your first reward.

If you want to combine all your loyalty cards in one place, loyalty app Swapi lets you link all your loyalty cards in its digital wallet. You can then use it for any in-store or online purchases. You can also earn Swapi points at its partner brands.

Rachel is a freelance personal finance journalist who has been writing about everything from mortgages to car insurance for over a decade. Having previously worked at Shares Magazine, where she specialised in small-cap stocks, Rachel developed a passion for consumer finance and saving money when she moved to lovemoney.com (opens in new tab). She later spent more than 8 years as an editor at price comparison site MoneySuperMarket where she helped support the CRM programme, as well as the SEO and PR teams, often acting as spokesperson. Rachel went freelance in 2020, just as the pandemic hit, and has since written for numerous websites and national newspapers, including The Mail on Sunday, The Observer, The Sun and Forbes. She is passionate about helping consumers become more confident with their finances, giving them the tools they need to take control of their money and make savings. In her spare time, Rachel is a keen traveller and baker.