Financial Literacy

Tim Hortons joins the world of rewards programs with Tims Rewards

By: Lisa Coxon on March 20, 2019

Canadian coffee lovers can rejoice. Tim Hortons just launched a new loyalty program on Wednesday.

The new rewards program — Tims Rewards — has been over a year in the making, and is based on how often you visit the coffee chain. After seven purchases, customers will get a free coffee or tea (any size), or baked good.

There are, however, a few stipulations. The visits have to be within more than a half-hour of each other. The purchase has to be at least $0.50. And Timbits and bagels are excluded from the baked goods rewards.

Customers can enroll in the rewards program via the Tim Hortons app, by downloading Tims Rewards to their digital wallet on both Apple and Android systems, or by getting a reusable swipe card from the chain. In order for each visit to be tracked and count toward a free reward, the loyalty card needs to be scanned before paying.

Tim Hortons said the program is a way of saying thank you to its customers, but as the Financial Post reported, “industry observers said it looked more like a proactive attempt to hold onto market share amid increased competition from the likes of McDonalds and Starbucks.”

Hooking the loyalty program up to the app or swipe card, they say, will give Tim Hortons a peek into the purchasing behaviour of its customers — valuable information from a marketing perspective.

Robert Carter, an industry advisor with The NPD Group, an American market research company, told the Financial Post that the coffee space is facing some competition. The McDonalds rewards program, for instance, gives customers one free beverage after they purchase seven hot beverages.

Tims Rewards differs in that the seven initial purchases don’t have to be coffee-related, which one expert says may have been strategic.

David Soberman, a marketing professor at the University of Toronto’s Rotman School of Management, told the Post that when faced with competition, companies need to “make it at least as competitive as the competitor.” By keeping the qualifying purchases at seven, but expanding its rewards program to include baked goods, Soberman said Tim Hortons has one upped Mcdonalds.

“Sometimes the competition forces you to do things,” he said. You don’t really have too much a choice.”

Loyalty programs are a big deal in Canada. As of 2015, the country boasted 130 million loyalty memberships, according to a study from Colloquy Loyalty Census Canada.

Canadian consumers tend to favour loyalty programs that offer smaller rewards items, like free groceries or movies, as opposed to hotel stays and flights. So Tim Hortons own program is lining up with that demand.

That said, loyalty programs are designed to make consumers spend more than they would normally otherwise. So it’s no surprise Tim Hortons has finally ventured into this space — though it is surprising it took the coffee chain this long to do so given how popular such programs are in the country.

Guests can register their loyalty card on Tim Hortons’ website or though the Tims app, where they can also keep track of their visits. For a limited time only, registered customers will also get a free reward when they buy something worth more than $1.50.

 

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