Tesco is revamping its Clubcard loyalty scheme by reducing the rewards available for spending vouchers, but it will continue its 'double' offer on collecting points.

From 6 December, customers will only be able to exchange vouchers for rewards worth three times their value, compared to the current four times exchange rate (see the Loyalty Points Boosting guide).

The supermarket giant says the overhaul will allow it to introduce more companies you can spend Tesco points with.

It adds the cut is vital to ensure the scheme is sustainable. This is because Tesco will continue to offer customers two points per pound on spending at the store and online, as it has done since August last year.

Prior to that offer, collectors got one point per pound spent. While technically a promotion, Tesco says it has no plans to end the 'double points' deal.

One point is worth 1p to spend at Tesco (that rate stays the same), though points can be exchanged for more valuable rewards from non-Tesco retailers, which is where the changes come.

What rewards are being cut?

The key is that where you can currently exchange vouchers for a reward worth four times the value (eg, turn a £10 Tesco voucher into a £40 P&O or Pizza Express voucher), this will fall to three times (eg £10 to £30).

You can exchange vouchers for travel, restaurants, days out and more.

Other offers where the value of the reward is dependent on the product will also drop. For example, where £3 in Clubcard vouchers gets you one adult Cineworld token, you will need £4 under the new regime.

Tesco cut the number of British Airways Executive Club miles you can earn in September from 600 per £2.50 of Clubcard vouchers (equal to 250 points) to 500.

It also cut the number of Airmiles – a separate programme run by BA that offers flight rewards – a Clubcard holder can earn from 60 per £2.50 of vouchers to 50 at the same time.

Carolyn Bradley, Tesco UK marketing director, says: "Part of the quid pro quo in keeping double points is we have had to make some adjustments to the Clubcard scheme to make it sustainable, which means we have had to alter the exchange rate."

Those buying petrol from Tesco will also see a fall in the number of points collected from one point per £1 spent to one point per £2.

How bad is this news?

While it means customers will get lower value rewards, Tesco highlights that points chasers are still better off under the post-6 December regime than prior to the double points launch in summer 2009.

Where a £100 spend would have earned customers £4 in rewards (when quadrupled) before double points were introduced, it will get them £6 in vouchers under the future 'three times' exchange rate, compared to £8 now.

What can you do with existing vouchers?

Points collectors still have time to spend their vouchers, and those they get with their November statement, due in the middle of next month.

Once the new regime starts you can still use old vouchers, but you won't get as much for them as now.

Online revamp

Tesco is also developing an online Clubcard account system, similar to internet banking, to allow it to send vouchers via the internet rather than by post. This will be ready at some point next year.

MoneySavingExpert.com view

Martin Lewis, MoneySavingExpert.com creator, says: "For the last couple of years, Tesco points chasers have never had it so good with Tesco doubling the amount of points you get – then quadrupling their value for those in the know.

"Now the millions of chasers across the country will let out a collective groan at what is a set-back, though not a killer. After all, the amount you can redeem per pound of spending is still higher than prior to Tesco doubling up points.

"More important is the fact this has got out in plenty of time. It means a clarion call needs to be made to anyone who has a Tesco points stash – wait until you get your next lot of vouchers come November then, if the Clubcard rewards appeal, pounce on them at quadruple value before the 5 December deadline."

Further reading/Key links

Slash shopping costs: Loyalty Points Boosting, Cheap Supermarket Shopping
Slash travel costs: Cheap Flights, Cheap Package Holidays