“Spend the points immediately” — Shark Tank investor Kevin O’Leary shares his opinion on Loyalty programs

Kevin O'Leary, a Shark Tank investor, isn't afraid to voice his opinions, particularly when it comes to airline loyalty programs. O'Leary criticized compensation programs harshly in a recent Instagram post, claiming they are "worthless" because of how quickly their value drops. He advises not to keep those points to yourself.

"The inflation in points from airlines is absurd. Just look at what you got 12 months ago for what you get now. The most important thing to do with any loyalty program is spend the points immediately," he said.

O'Leary compared the devaluation of loyalty points to inflation in the real world, pointing out that many travelers anticipate using them to fund their ideal vacations, only to discover that the same benefits now cost five times as much as they did in the past.

He advises using the points as soon as they appear in your account, even if it's only for regular purchases on sites like Amazon, rather than pursuing long-term redemptions.

In his words, it’s a game that retailers and airlines want you to lose by never cashing out. But there is actual monthly savings potential for astute customers who enroll in every program and redeem right away. The ideal loyalty plan for O'Leary is straightforward: make the most of them or risk losing them.

Shark Tank’s Kevin O’Leary calls Loyalty Programs “Worthless” and suggests immediate redemption

Kevin O'Leary isn't one to mince words, and the Shark Tank investor is brutally honest about loyalty programs. O'Leary reaffirmed his position in a recent video, claiming that loyalty points are "worthless" because of the relentless inflation that reduces their value. He underlined that a common error made by customers is to save points for future benefits.

"People think, oh, I'm gonna amass loyalty points. I'm gonna fly to Hawaii. You find out that two years ago it was 30,000 points. Now it's 170,000 points. There's nothing you can do about it," Shark Tank investor explained.

O'Leary advises customers to look for immediate redemption possibilities on websites like Amazon, whether they be for retail, travel, or even regular purchases. He joins every loyalty program he finds and makes use of the points as soon as they are offered.

He revealed, "I redeem them for whatever is redeemable. If you're a sharp consumer, you can save about 2.5% of your entire costs every month by just playing the game right."

He makes it quite evident that preserving points for later is a losing strategy. O'Leary cautions that the purpose of loyalty schemes is to postpone redemption in the hopes that consumers will never cash in.

His approach is straightforward: use rewards as soon as they are obtained. The best course of action in a system beset by inflation and declining value might be to move swiftly.

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For more informative videos by Shark Tank OG, Kevin O'Leary, follow him on Instagram.

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