British Gas has announced a £100 million drive to reward existing energy customers.
Launching in April, British Gas Rewards will see ‘loyal’ customers offered perks ranging from free boiler services to discounts on Sky TV packages.
The energy giant is also promising larger rewards and discounts for “long-standing customers”.
It comes just two weeks after rival energy giants, Npower and EDF Energy, announced they were considering loyalty programmes for their customers.
Is British Gas Rewards a good deal?
The scheme will no doubt be well received – indeed, a recent poll of loveMONEY readers found 75% of you supported the idea of rewarding energy customers who stick with a supplier.
But it’s worth repeating what we said when the idea of loyalty programmes for energy customers was first floated: you’ll be far better off by switching to a cheaper deal and it’s important these schemes don’t act as an impediment to that.
Let’s look at how the numbers stack up.
Loyalty still costs you
British Gas told us the £100 million will be invested over three years, so that’s a little over £33 million a year on average.
As the nation’s biggest energy supplier, it has more than 10 million customers, so it’s clear the “average” rewards won’t be worth that much in pure cash terms.
By contrast, the Government estimates that you could save around £200 a year by switching to a cheaper deal.
Of course, that figure is for those who have never switched. For regular switchers (which most of you are) the savings will be smaller – but still well above the few quid you’ll receive as part of a loyalty scheme.
Why not take a look at the cheapest gas & electricity tariffs on the market right now?
Don’t make switching more complicated
Another concern surrounding rewards schemes for energy customers is that it could make the process of switching far more complicated.
After all, you’re no longer comparing prices but perks as well.
The BBC asked British Gas about this, but the energy firm said it “strongly denied” such claims.
Rewarding customers not a bad thing
Ultimately, if a customer simply doesn’t want to switch energy suppliers then offering them a few perks is a welcome move.
But it shouldn’t cloud over the fact that their inertia, or ‘loyalty’, is almost certainly costing them money.
Unless British Gas offers the cheapest deal in your area, this is a loyalty scheme to be wary of.
Are we being too critical? Do you think it's a good idea? Let us know by voting 'yes' or 'no' in the poll below and, if you'd like, explain why you voted that way in the comments section below.