Millions of Co-op members can now bag a 5% reward on own-brand products and services, after the mutual revamped its membership scheme.

Members of the Co-op will start to receive new membership cards from today (21 September) as part of a move to "put membership back at the heart of the Co-op".

Under the new loyalty scheme members will get a 5% reward every time they buy a Co-op own-brand product or service - which can then be spent at the Co-op - with a further 1% going to charity.

The Co-op says a member spending £20 a week on own-brand groceries would earn £52 in rewards and make £10.40 for charities in a year. See our Loyalty points boosting guide for more on how to make the most of membership schemes.

How does the new Co-op membership scheme work?

As a member, every time you buy certain Co-op products or services 5% of what you pay will go into your membership account (which you can access online) – you can then spend what you save in any Co-op business whenever you want.

Meanwhile a further 1% of what you pay will go towards supporting community projects. When you log in to your online account you'll be given a choice of three projects local to you that you'll be able to donate to.

As things stand, you won't be able to earn or spend rewards when purchasing Co-op insurance products (though you may be able to from next year).

The introduction of rewards for members is an entirely new initiative. Previously members have had the possibility of benefiting from dividend payments (although no dividends have been paid in recent years due to the Co-op's poor financial performance). The new rewards scheme is in addition to the dividend and does not replace it.

The Co-op's produced the following video to explain how the scheme works:

How do I become a member of the Co-op?

The Co-op is what’s known as a ‘mutual’, which basically means it’s owned by its members. There are currently around five million members of the Co-op.

To become a member you have to make a one-off payment of £1. So if you shop there regularly, it's well worth considering joining, though remember rewards are only on Co-op own-brand products and services.

Can I still use my old card in the meantime?

Yes - Co-op reckons it’ll take a few weeks for all the cards to arrive through letterboxes, but the rewards begin straightaway regardless of whether you use your old or new card. The main difference between the cards is simply the new cards' updated branding.

How does the scheme work for Co-op employees?

Co-op employees have already been making use of the new loyalty scheme over the summer.

If you work for the Co-op your old card will have stopped working from 23 August - your new card should have turned up by now, but if it hasn’t you can call the membership helpline on 0800 023 4708.

What does the Co-op say?

The Co-op's chief executive Richard Pennycook says: “Our new membership scheme is at the core of our work to rebuild the Co-op and is part of our ongoing investment to ensure we deliver for our members, our colleagues, our customers and their communities.

"We have designed this modern membership scheme to embody the Co-op difference and are confident it will help us deliver against our determination to champion a better way of doing business for you and your communities."

Update: Co-op initially told us members would be able spend rewards on insurance products from now, but a spokesperson has since issued a correction stating that members won't be able to earn or spend rewards on insurance products until next year.