ztnjpv

Honest research question for members of a loyalty program that rewards points/miles for dining at participating restaurants (Hilton, Delta, AA etc...):

Does a simple discount...say 2-3%...at the time of payment for showing your membership card in an eligible miles/points program entice you as much as, less than or more than getting the actual miles/points directly credited to your account?

sdsearch

I don't quite understand the question. There is no way of getting a 2-3% discount for showing your membership card in an eligible miles/points program.

You don't get either a discount or miles/points by "showing" your card. You have to actually charge the dine to the registered card. (If it wa a matter of just "showing", you could "show" to get the discount and charge to get the miles! "Greedy" FTers would love that! )

The same company that runs these dining programs, Rewards Network, also runs a cashback program called iDine, but it's actually more cashback I think (at least 5%?).

Anyway, my thought is: I can get more than a 2%, 3%, or even 5% discount usually by simply eating at a cheaper restaurant that doesn't participate in the airline/hotel diining program. I typically have to explictly choose to go to a participating restaurant (if I wasn't after the miles, I would have gone to a closer restaurant probably). So once I've gone to a participating restaurant, I want the miles, no some discount.

There's another issue: It's very hard to earn miles, compared to saving money on meals. You can save money on meals by eating at less expensive restaurants or restuarants with easy-to-find coupons, or by getting take-out from a food bar at many grocery stores these days -- and then earn extra points on some credit cards for grocery purchases -- or by cooking at home yourself. But it's very costly to buy miles outright, and miles earning opportunities that are as good as these dining programs are few and far between (especially if you don't fly paid that much, don't stay in hotels enough , and don't rent cars often enough).

Now, having said all that: I don't consider Hilton a good choice for a dining program. Reason: There is a much better way to earn Hilton points fast, through a "highly churnable" credit card:

http://www.flyertalk.com/forum/miles...nors-visa.html

But the credit cards for ailrines are much less frequently churnable, so I find it more "profitable" to earn miels (rather than hotel points) for my dines.

(Also, the dining earn rates on the hotel programs -- Hilton and Priority Club -- seem rather wimpy compared to the dining earn rates on the miles programs. 8 hotel points is just not worth as much as 5 miles to most people.)

ztnjpv

Thanks for the response. The reason I am asking is because I own a restaurant and I had a meeting with a Rewards Network rep about being a participating restaurant. I found the cost to the business to be quite high (16-20% of the bill+tip). That being said, I have the option to limit visits to once per month. However, to perhaps encourage repeat biz from these people without being gouged by the program, I was curious about the question that I asked to see how people feel about going BACK to a place that offers a simple discount after the miles/points earning visit by showing the card. I mean, it's not an earth-shattering savings but it's still better....monetarily speaking...than most points/miles programs.

Points Scrounger

Most "normal" folks (everyone except obsessive FT'ers) will return to a once-a-month joint if they really like the place.

sdsearch

Well, it could vary from one person to another.

But, perhaps as importantly, it might vary from one area to another.

Where I live, I have several participating RN restaurants within a dozen-minute walk from my house (in different directions). Most of them are one/month, but instead of visiting them more than once a month and then not earning, I rotate among them. (And then within a few minute drive, I have even more, including some with "unlimited" dines. I use them to fill out the month.) For context, I eat out at home once or twice a week. With all these particpating restaurants to choose from near me, even with a substantial number of them once/month, I never have to eat at a restaurant that doesn't give me miles nor when they don't give me miles.

Near work and the places I most often stay in hotels, nothing is within walking distance (no restaurants at all, typically, or at most one or two that don't appeal). So I'll drive a few miles to find a particpating restuarant (and one that I haven't used yet that month if they're once/month, but in those places fewer are once/month). So again, I rarely eat out there at a non-particpating restuarant or at a once/month restaurant that I've used already that month.

However, in some places that I travel to, if I'm staying there several days, and there's only one particpating restaurant that I'm interested in, if it's once/month, and if I really like it (more than the non-participating restaurants), then I might eat there a second time even though I don't earn the second time.

I thus can extrapolate to say that I might visit once/monthers more than once a month if I lived in an area where there were only one or two particpating restaurants near me and both were once/month.

I disagree that the value of miles is less than the value of a small discount. I depends how you use your miles. If, like me, you only use them to redeem for business or first class international flights, which you could never come close to affording in cash, they're "priceless", or at any case valued at 3, 4, 5, 6, 7, or even 8 cents a mile (if compared against the lowest cash price for a similar flight). As a VIP member, I earn at least 5 miles per $ spend. Taking the low value of 3 cents a mile, that equivalent to a 15% discount. Taking a medium-low value of 5 cents a mile, that's equilvalent to a 25% discount.

But often RN is givin me a promo with some extra miles. In that cases, it's even way more than 15% of 25% equivalent.

In this case, you can see that I actually am likely to get more value of out of the miles as I redeem them (only for high-value flights) than the cost of what you're paying to RN for those miles!!!

And now that you see these numbers, perhaps you can understand why just a 2% or 3% discount at the same restaurants would have little appeal.

(Again, in most places I have lots of restaurants to choose from, including probably ones with lower prices than the participating RN restaurants. So unless I really like the once/month participating RN restaurant, rather than chose a low diso.... like 2% or 3%, I'll just choose a lower-priced non-RN restaurant.)

But you have to look at the survey that RN asks people to fill out to get at another thing which shows why not all people are like me. On each survey, they ask "did the participation in the dining program affect you choosing this restuarant" (or something close to that). That's because some people just sign up all their cards, put don't pay attention to which restaurants are participating and which ones aren't, and then just happen to have their cards work at certain restaurants on certain visits. Those people, since they choose your restaurant (or any restuarant) specifically because they participated, are perhaps more likely to go for other promotions you offer (than people so dedicated that they limit their dining to restaurants where they'll earn miles).

But beware that you don't give both at the same time (if that's not what you want!). RN claims that we can't earn miles when a "discount" is used, but the way many restauarnts code their discounts it doesn't come through to RN, and so we earn miles anyway and "double dip" in those cases. If you don't want people to be able to use a discount and earn miles on the same visit, you have to talk to RN to figure out how to do that. (You can't tell by the look of the card, because someone could have an airline card that isn't registered with RN, and even more likely someone could have a generic no-rewards card that is registered with RN.)

Jailer

Exactly, and exactly why Flyertalk is the wrong place to do market research about your decision to link your restaurant with RN.

I take perverse pride in only eating once per month at once per month places, unless I�ve bought a gift card to see me thru the month. Likewise, and similarly anal-compulsive, once a restaurant has left RN, I go out of my way to avoid it. For reasons unknown, I am not bait-shy about coupons. If I find a place I like because I�ve used a coupon I will keep going back: go figure.

It is an interesting math problem to take the (amount of extra business driven by the miles minus the RN commission)-(the commission paid to folks who would have eaten at your place anyway without the commission). Some are the later group don�t care enough to change their dining habits, and some might have stumbled into your place without knowing you are linked in to RN. That later realization has to be annoying for a restaurateur.

I have noticed over the years that some restaurants try it for a few months then leave and never return; some places periodically enter and exit the program; and a solid core hang in year after year. Although some restaurants are somewhat seasonal, I suspect that the decisions to remain with RN are perceptions of profitability instead of any kind of complex modeling.

RN was taken private a few years ago so it is harder to see if they are profitable, but if they are, say, giving an average of 4 miles per dollar, and bulk buying miles at a little over a cent, then they should be doing pretty OK at a 16-20% commission. I�m sure someone will fine tune my math/assumptions.

Points Scrounger

Following up on Jailer's points raised, folks can belong to multiple partner programs at the same time, with the limit being one dine per partner, rather than staying away completely after the first visit per month.

sdsearch

While that is true, I'm not sure how often it happens and how much it would therefore affect what the OP is asking about.

First of all, most people don't belong to that many programs.

Second, even of those that d (and who belong to at least one dining program), only a fraction belong to multiple dining programs. (Doing so requires a number of cards, and it furthermore requires keeping straight which card is registered in which program!)

Third, if one program is giving me a bonus, and another isn't, I'm more likely to go find another participating restaurant I haven't "maxed out" this month in that program, rather than use a program from another card just so I can eat a second time at a once/month place while still earning something.

As a result, it's been a couple years since I've used this trick, even though I belong to half a dozen different dining programs, and regularly maintain VIP status in at least 3 of them.

Of course, I've never heard from a restauarant owner who asked this question: Would you rather, gvien only this choice, that someone "work around" the once/month limitation and get the miles twice in one month by using two different programs, or would you rather that they just avoid your restaurant for a month after eating once/month? (But again, the former choice is only available to a small fraction of RN diners, so it's more a theoretical question than a very practical one.)

Points Scrounger

I haven't had to do the Square Dance routine (of switching partners "mid dance" as it were) for a while, as we have no 1x joints locally. Instead, we've had owners opt out of AS credit, keeping all other earnings options, since anyone here whose credit rating isn't a giant flashing skull-and-bones has an AS Visa issued by Bank of America, and are signed up for AS-earning RN automatically (it seems).

JDiver

I suspect that could work for some of us, but I wonder if such an instance is covered (and prohibited) by the TOS a property signs with RN?

For me, the miles earning often provides me the decision point between other similar restaurants (in food type, quality, ambiance and price point).