Fuel rewards: Bank programmes better than those offered by petrol stations

BP has joined Shell, Sasol, Astron Energy and TotalEnergies in launching its own rewards programme in South Africa. This leaves Engen as the only major without its own rewards programme (which may change following the acquisition by Vitol’s Vivo Energy unit this year).

Its launch offer will see motorists getting a total of 30c per litre back on fuel spend when they swipe their BP Rewards (20c per litre) and Pick n Pay Smart Shopper (10c per litre) cards. At the combined amount, it offers the joint-best earn rate across fuel retailers.

Sasol Rewards offers an outright 30 points per litre currently, redeemable at a rate of 1c per point (meaning 30c). It does retain the ability to change that conversion rate at any point.

Sasol is interesting in that it offers a shared account where a family or friends are able to ‘save’ their rewards to a single card.

At a level of 30c per litre, the effective cash back is 1.3% (based on the August 2024 inland price of 93 octane). Shell’s V+ Rewards and the TotalEnergies Club offer rewards of 15c per litre. (Technically, TotalEnergies’s programme works on points, with one point equal to 1c at the moment.) The effective cash back of these is just 0.66%.

Astron Energy’s rewards programme differs completely from the others in that it offers customers a chance to unlock daily and monthly reward vouchers. These vouchers can be used for airtime, fuel, convenience stores, FreshStops or groceries.

What is noticeable from the earn rates offered directly by fuel retailers is just how much lower they are than those offered by banks and insurers. It is completely unsurprising as the retail margin on fuel is just 15% – there’s not an awful lot of margin to give away in the form of incentives.

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Banks use merchant interchange fees and fees earned on other products to reward their customers. Not every UCount or eBucks or Vitality Money customer (‘member’) will be on the highest rewards tier. One needs to be highly engaged – and hold multiple products from the same bank – to get the maximum rewards.

* At the August 2024 inland price of 93 octane petrol, R22.71

There is a clear leader of the pack when it comes to banks: Discovery. But the top tier of rewards relies on a member achieving Diamond status, which is not simple (the group may contest otherwise). The up to 70% cashback is dependent on many vectors.

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FNB’s eBucks is next with up to 35% back in eBucks. This, however, is dependent on the customer attaining Level 5 for eBucks and having a financed car with Wesbank and car insurance via the bank.

Standard Bank’s uCount and Absa Rewards are both not far off. Standard Bank has a “double up” promotion which requires that a customer holds a number of products alongside a card.

This article was republished from Moneyweb. Read the original here.