Thrifty Blue Chip Rewards gets rid of points — is Hertz next?

Rental car company Thrifty — owned by Hertz — has long had an independent loyalty program called Thrifty Blue Chip Rewards. The program is surprisingly simple — you'll earn 1 point per $1 spent and free rentals start at 500 points per day. There's no elite status and no-frills, just a straightforward loyalty program.

That will change soon. The rental car company announced that it would stop awarding Blue Chip Rewards points on Oct. 1, 2020. Going forward, it will instead give Blue Chip members 10% off the base rate on all rentals, regardless of the rental price.

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Laura Smith — Thrifty's Executive Vice President and Chief Marketing and Customer Care Officer — provided the following insight on the change:

"With the majority of customers renting with Thrifty for leisure trips, we believe this enhancement to our Blue Chip Rewards program will allow more people to get a great deal on their rental car at Thrifty and enjoy more immediate membership benefits."

Current members with at least 525 points will be able to use them any time over the next 24 months. On the other hand, those with fewer points will receive an "immediate offer" to use towards a future rental. This offer hasn't yet been publicly discussed.

This news comes months after Hertz filed for Chapter 11 bankruptcy at the end of May 2020. This type of filing lets Hertz stay in business while restructuring the company and planning a future roadmap.

Related: Is the Hertz Free-To-Go Pass worth $99 per year?

Is this change positive for leisure travelers?

At first glance, this looks like a negative change. A straight discount is ideal for those renting cars occasionally. However, points allow frequent travelers to offset the price of a high-price rental. This is especially true for business travelers who frequently rent for work and use points for leisure trips.

That said, Thrifty's primary audience is leisure travelers. Most of its locations are in urban and suburban neighborhoods, as well as leisure-heavy airports like Charleston (CHS), Orlando (MCO) and Phoenix (PHX).

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Leisure travelers are not likely to rent enough in a given year to earn a free rental. In which case, they come out ahead with a discount on low-cost rentals. For example, a $30 discount on a $300 rental is much more valuable than 300 points you'll never actually use.

At the same time, though, a $525 rental with a $52 discount is significantly less valuable than a free weekend rental that costs 500 points. In the end, this change rewards infrequent renters more than loyal members, which I don't think is the right way to build loyalty during a travel downturn.

Further, this effectively kills Thrifty as a viable option for business travelers. After all, what's the point of renting with Thrifty if you can rent with another rental company that offers points and elite status for your business travel, along with rental car discounts?

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

How this affects Hertz's brands going forward

This change shows that The Hertz Corporation is working to differentiate its three rental brands: Dollar, Thrifty and Hertz. Hertz will remain its business travel leg while Thrifty will cater to leisure travelers. I think that we'll see more changes that reaffirm these differences in the future.

It will be interesting to see how Hertz positions Dollar going forward. We could see this become the budget-minded brand, which might mark the end of its loyalty program too. At the same time, we could see it rolled into Hertz or Thrifty — only time will tell.

Will Hertz follow suit?

Hertz hasn't announced similar changes and I don't think it will. That is mainly because the brand has a much larger business traveler base. It's long offered an elite status program, has many corporate partnerships and maintains huge operations at major business destinations around the U.S., Europe and beyond. These are all things that Thrifty doesn't have.

Hertz knows that if it were to ax Hertz Gold Rewards points, it would lose a ton of business to National, Enterprise and other business-focused rental car companies. Business travelers need these elite perks to stay loyal to a single travel company.

That said, I think Hertz has something in the works for Hertz Gold Rewards too. The company is positioning this discount as a positive for leisure travelers. So naturally, I think it will enhance Hertz Gold Rewards to entice business travelers to switch loyalty when travel resumes.

As previously discussed, loyalty programs will be the key to saving rental car companies in a changing travel world. I think we could see business-focused rental car companies treat their loyalty programs more like airlines, adding cobranded credit cards and becoming bank transfer partners.

Related: Everything you need to know about the Hertz My Car subscription

Bottom line

Thrifty swapping points for a 10% discount is a controversial move. It will benefit leisure travelers who rent cars infrequently while hurting occasional customers or those who book expensive rentals.

It's an unfortunate move but makes sense as Thrifty transitions to a leisure brand and Hertz works to restructure after filing bankruptcy. Thankfully, I don't think that Hertz will follow suit with Hertz Gold Rewards. The Hertz brand is more business-focused and needs a proper loyalty program to recover once business travel resumes.

Feature photo by Jevanto Productions/Shutterstock