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Financial Resilience at Christmas: Supermarket Christmas Club Comparison Reveals Mixed Bag of Benefits
Christmas may be months away, but the resilience of many families’ finances can be tested in the lead up and credit-crunching aftermath. MoneyHub, the financial comparison website, commissioned a study to compare the various Christmas clubs offered by supermarkets. While value was offered for regular contributors, the stipulation that balances on any card inactive for 24 months would become property of PAK’n’SAVE or New World was one of several aspects of the programs consumers needed to be aware of.
MoneyHub’s Senior Researcher Christopher Walsh said “the cost savings offered by supermarket Christmas clubs are not widely known by the typical New Zealander, and even less know about possible limitations and pitfalls. We’ve compared the offerings from Countdown, PAK’n’SAVE and New World side-by-side as a way to understand what’s on offer and which is best”.
“The clubs work in a similar way – a customer tops up $5 or $10 for example, and a bonus is applied to the balance if it’s used in the Christmas period, set at 1 December onwards. What the bonuses were differed between supermarkets, and for PAK’n’SAVE and New World, the time of the year”.
“In dollar terms, the best value was by offered by PAK’n’SAVE and New World Christmas clubs, which gave a bonus of up to 6.44% on money contributed to the club, and year-round access to the balance if a customer needed it”.
“As it gets closer to Christmas, PAK’n’SAVE and New World offer less of a bonus – 6.44% falls to 3.40% for deposits made from 1 September to 30 November, where as the Countdown club offers a constant bonus of 5% for money deposited before 30 November”.
“Savvy customers can get $17 free in one day by contributing $500 to their PAK’n’SAVE and New World club account on 30 November, or $25 if the same contribution is made with Countdown”.
“Despite the savings, there are a few things to watch out for. Firstly, it is essential for anyone entering into these clubs to be smart about their account and security. For example, the PAK’n’SAVE and New World clubs suggest that customers register their Christmas club card otherwise a lost or stolen card would see the balance lost. And because Countdown only issues Christmas vouchers on paper, not electronically, lost or stolen vouchers would be gone for good and could not be re-credited to a customer”.
“Also, once you've deposited money into any of the clubs, you can’t then withdraw it as cash – the money must be spent at the supermarket. Christmas Club Cards are not a credit or charge card and cannot be exchanged for cash. So, once you've decided to join the club, all money must be redeemed at the supermarket you joined. There is no exception to this rule”.
“All Christmas clubs let customers use an alternative payment method to part-pay if they didn't have a sufficient Christmas Club balance”.
“A Christmas club chains a customer to one supermarket. If items you want to buy are cheaper at another supermarket, you won't be able to use club balance and will either have to pay cash at the other supermarket or accept you will pay more using your balance”.
“The good news is that customers can use Christmas club money BEFORE and AFTER Christmas; funds are not locked up until Christmas, but if they’re used before 1 December in the same year they were purchased no Christmas bonus was added”.
Bonuses Offered by Supermarket Christmas clubs for spends after 1 December
Period of $5.00 deposit PAK’n’SAVE or New World + Countdown
1st December to 29th February $5.32 (6.44%) $5.25 (5%)
1st March to 31st May $5.27 (5.54%) $5.25 (5%)
1st June to 31st August $5.22 (4.40%) $5.25 (5%)
1st September to 30th November $5.17 (3.40%) $5.25 (5%)
“Financial Resilience is something every New Zealander should be able to aim for year-round, but Christmas put tremendous pressure on already stretched finances. We applaud the Commission for Financial Capability for identifying the growing need for individual Financial Resilience and dedicating the upcoming Money Week 2018 to this very important issue”.
MoneyHub has released the guides to share previously unpublished tips and money-saving techniques to improve financial resilience amongst everyday New Zealanders and to make Christmas more affordable for individuals and families alike. The pages will be updated on an ongoing basis.