Rental car loyalty needs a makeover: Here are the changes I'd like to see

Rental car companies have made headline after headline since the start of the coronavirus pandemic.

Early on, we saw Hertz file for bankruptcy and other rental car companies fire sale their inventory in response to a huge downturn in travel demand. Now that travel is on the upswing, it's hard for these companies to buy new cars given a global computer chip shortage that's disrupted the automobile supply chain.

In turn, this is part of the reason why rental cars are more expensive and harder to find, leading some to declare a "rental car apocalypse." Travelers have resorted to drastic measures to get a reasonably priced rental: Think renting a U-Haul for a trip around Hawaii or booking multiple cars in case one rental agency accidentally overbooks itself.

But there is another rental car issue lurking in the shadows: rental car loyalty programs.

Rental car loyalty programs have been notoriously lackluster, offering limited elite status benefits and poor redemption value. This is bad for consumers and the rental car companies since there's little incentive to stick with one rental car company. This is especially true given the influx of new competition, like Lyft's rental car service.

Let's take a closer look at what these companies are doing wrong and how they can improve for the future.

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The current state of rental car loyalty

The current state of rental car loyalty isn't great — here are my gripes with many of the loyalty programs.

Elite status benefits aren't guaranteed

Right now, the best part of many car rental membership programs is simply being able to skip the normal pick-up line at select locations. And while those lines can be brutal, that's a pretty low bar.

I'm a Hertz President's Circle elite thanks to my Delta Platinum Medallion elite status. I was originally excited about this benefit since it promises car upgrades, bonus points-earning and other assorted benefits. That said, these benefits — namely upgrades — aren't really guaranteed.

For example, Hertz promises top-tier President's Circle elites "guaranteed" one-class upgrades and the "widest" selection of cars at Ultimate Choice lots.

But this simply isn't true. I rented with Hertz five times in 2020 and 2021. Three rentals were at airport locations and two were at neighborhood locations. A rental at New York-JFK landed me a loaded Ford EcoSport in the Ultimate Choice lot, but other reservations weren't upgraded.

Worse, there are restrictions on when you're actually eligible for these upgrades. With Hertz, you're not eligible for an upgrade if you book a compact or economy car. This restriction is strange to me, especially given the fact that even compact and economy car rentals are expensive nowadays.

Points are hard to earn, tough to redeem for good value

Another issue I have with rental car loyalty programs is the value of the points you earn on rentals.

Generally, there are two options: airline miles or rental car points. Airline miles are generally earned per day of the rental, while rental car points are earned based on the cost of the rental. In the case of Hertz, you're awarded 1 point per dollar spent (or up to 1.5 points per dollar with elite status).

Hertz and Avis both use this system and publish award charts for points redemption. In the case of Hertz Gold Plus Rewards, free rentals start at 750 points per day on "Standard Rewards." This seems simple enough, but Standard Rewards are only bookable on certain days of the year and even then they aren't guaranteed to be available.

Other dates require you to book "AnyDay Rewards" that are twice the cost of a Standard Reward. This significantly reduces the value of your points and makes them difficult to use if you're traveling over the holidays or summer break. Plus, it adds a ton of confusion to the redemption process and may make travelers reconsider having loyalty with one rental car company, myself included.

But that's not to say that all rental car companies handle points so poorly.

National's Emerald Club takes a different approach and gives members a free rental day for every seven days they rent. Elite members have lower requirements, with Executive-tier members earning a free rental every six days and Executive Elite-tier members earning a free rental day every five days.

In my mind, this is much simpler than dealing with a convoluted points program that provides limited value at best.

The tech behind these programs is lackluster

One last thing to note: The technology behind these programs is, frankly, terrible.

The best example of this is Hertz. Over the past year, I've had points disappear from my account for no discernable reason and with no explanation. Further, the user interface looks akin to 1990s-era Yahoo.com and is difficult to navigate on a mobile device. Much of the time I can't even see my past points-earning to audit my account and using them isn't an intuitive process either.

For example, here's a screenshot of my account page. I rented a car in mid-August and earned roughly 500 points on the rental. The points are there, but the activity isn't showing on my account. This is frustrating and makes it impossible to know how my points were calculated.

This is something that Hertz and other rental companies in similar situations need to fix in order to make their loyalty programs worthwhile. Not doing this makes it more appealing for renters to book with the cheapest program and credit their rewards to an airline partner. It may provide less value, but the renter can go where they get the best price and see their rewards in one place without worry.

Having a reliable website for viewing and using awards increases the odds a traveler comes back. Not doing this leaves a bad taste in the mouths of occasional and frequent renters alike — especially with new tech-forward options coming to the market.

Related: How to never pay full price for a rental car

How rental car companies can improve loyalty programs

Now that we know the pain points of rental car loyalty programs, let's look at how rental companies can improve their programs for the future of travel.

Revamp loyalty websites

Going off my last point, rental car companies should revamp their loyalty websites to be user-friendly and work as intended. Refreshing these websites is a relatively easy first step in offering a top-notch loyalty program that makes renters feel comfortable renting a car with a single company going forward.

Provide benefits that are actually guaranteed

Further, companies like Avis and Hertz need to make their upgrades and other benefits guaranteed without restriction. President's Circle members should be upgraded by at least one class if a better car is available, regardless of whether they're renting an SUV, compact car or sports car. If no upgrade is available, I'd like to see bonus points or another incentive offered as compensation.

Offering real benefits that provide value makes renting with the same company appealing, as renters are assured that they'll have a better experience with one company over another. After all, what's the point of spending an extra $10 a day to rent with Hertz over Enterprise if a President's Circle member may not actually receive the upgrade he or she is entitled to?

On a similar note, it'd be great to see more high-end vehicles reserved for elites in the Hertz Ultimate Choice and National Emerald Aisle lots where members can pick their own cars. When I rented at JFK, the nicest vehicle available was a Ford EcoSport. The car was fine, but it definitely wasn't the same as driving off in a BMW X5.

I'd also like to see rental companies offer new benefits to differentiate themselves from other programs. One thing that comes to mind is luxury upgrade certificates. These could let a rental car elite jump from a compact car to a luxury vehicle for a certain number of days. Like airline upgrade certificates, these could be earned when qualifying for status or hitting other milestones.

Publish a simple award chart

Further, I'd also like to see other rental companies follow National's lead and offer fixed pricing on awards. Hertz, Avis and others should ditch the different standard and peak award rates and instead offer a single redemption rate good on all dates, making points easier to use and more valuable.

Launch lucrative cobranded partnerships

I'd also like to see rental car companies roll out cobranded partnerships and ways for members to earn points. This could be by adding a credit card transfer partner, launching a shopping portal or any number of other earning methods.

This would make it easier for renters to earn points toward free rentals. Plus, it would give rental companies a new revenue stream and make their programs more engaging. Airlines use their loyalty programs as a way to keep travelers engaged, so there's no reason why rental car companies can't do the same.

Related: 10 best ways to redeem your points and miles for a car rental

Bottom line

Rental car companies have had a tough ride during the pandemic — but that's no excuse for a shabby loyalty program.

One way these programs can better position themselves during the ongoing travel recovery is revamping the loyalty programs to entice travelers to earn points and stay loyal to a single rental car company.

This will be especially important as business travel starts to pick up. These travelers generally have a choice in where they rent, and the price of a rental isn't as high of a priority as for a leisure traveler. Having access to worthwhile points, a good website and guaranteed benefits will keep more of these travelers loyal and bring in much-needed business.

Likewise, leisure travelers will be more likely to stay loyal if the program provides good redemption opportunities and cobranded partnerships that make it easier to earn points. As discussed, this could include credit card partnerships and shopping portals.

Even after travel returns to a more normal pattern, the car rental booking doesn't have to be the afterthought of the planning process. With some attention and tweaking of car rental loyalty programs (and websites), it could become a more enjoyable and rewarding two-way street.