Virgin launches a new rewards deal, but is it worth signing up for?

The new rewards system hopes to entice customers by offering everything from air miles to hot dog rolls.

The Virgin Red scheme encourages people to visit its website or download its mobile app – and purchase goods and services offered by a number of online stores.

It’s a bit like a cashback site, but instead of getting a refund, you earn points. Can be used to obtain discounts on a list of services and goods. It does not offer a loyalty card like the schemes run by Nectar and Boots.

Virgin Red will give away 15,000 points to anyone who changes their bank account to Virgin Money via their website, and that can be put towards the 20,000 points required for a return flight from London to New York

Despite offering an a la carte choice of items to purchase, critics believe the range of online stores where you can earn points is limited – and unless you spend them on a Virgin branded product, it may offer poor value.

So far, about 40 online stores have signed up for the points offer – but only if you spend through Virgin Red and not directly with the stores themselves. They include John Lewis (offering two points for every £1 spent), Boots (up to four points for every £1), and Marks & Spencer (two points for every £1).

The most generous points are available on Virgin branded services. For example, buying a hot air balloon ride with Virgin Experience Days earns ten points for every £1 spent.

Virgin Red will award 15,000 points to anyone who changes their bank account to Virgin Money via their website – enough points to buy half a dozen bottles of Prosecco from Virgin Wines or get the 20,000 points required for a return flight from London to New York via Virgin Atlantic (excluding taxes) . Instead, he can buy 75 Greggs hot dog rolls.

Rob Burgess runs the Head for Points travel loyalty program website. “The bank transfer offer is probably the best deal,” he says. “The only other way to get a lot of points is to fly with Virgin Atlantic, unfortunately there aren’t a lot of options at the moment.

Virgin may struggle to compete with other loyalty schemes because it does not offer points to supermarket shoppers. Competitors such as Nectar not only offer points at Sainsbury’s, but also more than 300 other stores. Tesco also offers points for shoppers.

How does it compare to other loyalty schemes?

nectar

Shoppers earn 1 point for every £1 spent at a Sainsbury’s supermarket. Each nectar point is worth 0.5p. Points can also be collected and spent at over 400 other stores.

Tesco club card

You earn 1 point for every £1 spent at a Tesco supermarket. Each point is worth 1 penny. Points can be spent at the supermarket or with more than ten partners.

Shoppers earn four points for every £1 spent at Boots

Avios

You can earn between one and ten points for every £1 spent at over 1,000 stores accessed via the British Airways eShop. Each point is usually worth a penny and can help pay for flights, upgrades, hotels and car rentals – or be redeemed for Nectar points.

Shoes feature

Shoppers earn four points for every £1 spent at Boots. Each point is worth 1 penny. It can be spent in the store. You can also earn extra points by purchasing Boots own brand products.

The Boots Advantage card may not give you a choice on where to earn and spend points, but it is generous. For example, she earns four Boots points for every £1 spent on her card – worth 4p when you shop at Boots.

With Virgin Red you can earn up to four Virgin points for £1 spent via the Boots website – but their points are less valuable. For example, a £1 roll of Greggs sausage costs 200 virgin points, so each point is only worth half a penny.

Helen Knapman, investigative editor for the consumer website Money Saving Expert, says that although Virgin Red allows you to earn points through 40 online retailers, you can only use points at 20 online stores.

Greggs only accepts points at the counter – by scanning a ‘QR’ code from your phone via the Virgin Red app.

“You shouldn’t shop based on loyalty points alone — but on the money you can save,” says Knapman.

Those who wish to convert their Virgin Red Points into flight money must link their scheme to a Virgin Atlantic Flying Club account. The main points competitor for flights is Avios, which is used by members of the British Airway Executive Club.

But Avios has links with over 1,000 stores where you can collect points by shopping online through the BA Executive Club eStore.

Another popular way to collect Avios – 1 point is collected for every £1 spent – is to use a BA American Express card. Each point that is usually spent is worth a penny on future purchases – for flights, upgrades, hotel stays or car rentals.

But Avios has added flexibility by being linked to the Nectar rewards system. If you collect 250 Avios, it can be converted into 400 Nectar Points. Anyone who joins Virgin Red will get 500 bonus points on any spend before the end of July.