Do shareholder perks still exist and should they affect my decision whether to invest or not?

Whilst it probably goes without saying that an investment should never be made purely to receive a particular perk, everyone loves a discount and so some companies still provide these as an incentive to invest in them. 

In truth, shareholder perks tend to be fairly rare now but a decade or two ago, they were all the rage as a way of enticing people to purchase a particular company’s shares.

It is often the case that individuals are inclined to invest in shares of well-known companies whose products or services they use, and that even if those shares perform poorly, they will tend to hold on to them so they continue to benefit from any shareholder perks.  Investors may view perks as a form of return on their investment and attempt to reconcile what they receive as a shareholder against the performance of the share price in the market.

Not surprisingly, companies selling “lifestyle” goods and services such as clothes, restaurants, holidays and so on are those most likely to still provide perks.  If you own shares in Merlin Entertainment for example you have the opportunity to purchase their annual pass at a discount and visit parks such as LEGOLAND and Alton Towers for less.  Other examples are Marks & Spencer whose shareholders may be entitled to receive “spend and save” vouchers, and Carnival Plc whose shareholders may benefit from an on-board credit for the duration of their cruise.

There’s no such thing as a free lunch though and as you would expect, there are always terms and conditions attached, including how many shares you have to own to qualify.  The value of the perk (which can be withdrawn at any point remember) might also be outweighed by the cost of the investment.

Many perks have also failed to move with the times and you’re probably better off concentrating on the fundamentals of the company.  After all it is these fundamentals that will have an effect on the true performance of the shares.