BrainTrust Query: Canada's Second Unofficial Currency Gets a New Addition
Canadian Tire Money is probably one of the most successful retail loyalty programs out there. If you haven't heard of it, the program is very simple. You buy stuff; you get Canadian Tire Money back on your purchase when you pay by cash or debit. That money can be used on anything at the store with no conditions or limitations.
To illustrate how flexible the program is, a friend of mine just purchased a clearance tagged Master Chef Barbecue for $499 and paid for all of it, taxes included, with a huge wad of Canadian Tire Money he had been saving up since 2000. You even get Canadian Tire Money when you fill up at Canadian Tire Gas Bars. Its simplicity has made it a fixture in Canadian retail since its inception in 1958.
Canadian Tire created the
program in response to gas stations offering toasters and dishes as incentives
to their customers. Wanting to build up their gas business and stay ahead
of their competition, they created the "cash bonus coupon" which could
be used for any merchandise the customer wanted at the adjacent Canadian
Tire store. Over the decades, the program evolved and purchases made at the
store qualified for the coupons. As credit cards came on the scene, CT offered
money on cash purchases only to 
discourage use of credit cards (and
save on the processing fees that retailers are charged). As the demand for
credit cards increased, CT created and offered the Options Mastercard in
2000. Customers can collect CT Money on any purchases made with the card
(even outside of Canadian Tire stores).
So what's next for Canadian Tire Money? On December 5th and 6th, customers who spent a minimum of $25 at the store received a special limited edition $1 Canadian Tire Money coin. This coin is actually minted by the Canadian Mint so it's high quality tender that will be sure to end up as a collector's item down the road. (Yes, collecting Canadian Tire Money is a popular hobby here in Canada.) Is it a sign of the times? The Canadian government has been trying to get rid of paper money for a long time now and our $1 and $2 tenders are already coins (called loonies because of the loon that appears on the $1 coin and toonies because we couldn't find a better name for the $2 coin). This dollar coin from CT could be a sign that paper Canadian Tire money will be a thing of the past.
Canadian Tire Money is actually considered part of Canadian culture and I'm not sure a bar coded key ring or plastic card can deliver the same value message that being handed paper money can.
Discussion Questions: Does Canadian Tire's paper money program seem archaic or is its simplicity what makes it so successful? What is your overall view of cash-rewards driven loyalty programs versus other incentives?