79% of consumers want to use points beyond the brand where they earned them
Consumers are increasingly interested in treating loyalty points as a currency for a variety of transactions that extend farther than buying products and services from the brand that manages a rewards program, based on research published by Engage People and Loyalty 360.
The provider of loyalty program technology and the industry association gathered survey responses from more than 1,000 U.S. consumers to produce their report, titled Making Rewards More Valuable to Members.
Engaged People and Loyalty360 found 93 per cent of shoppers considered the notion of combining points and cash appealing, and nearly as many (90 per cent) said they would use points more frequently if they were seamlessly integrated at checkout.
Cash-back and statement and statement credits were the top benefit, cited by 77 per cent of those surveyed. This was followed by discounts and promotions at 58 per cent and travel, gift cards or merchandise, which appealed to just over half of consumers.
If a loyalty card was accepted across more everyday merchants, 60 per cent of shoppers said they would use it more often.
“For brands enhancing their customer loyalty offerings, the experience of using rewards deserves the same attention as the rewards themselves.” the report’s authors wrote. “These opportunities give brands ways to make rewards easier to redeem while preserving members’ choice in when and how they use them.”
360 Magazine Insight
Not surprisingly, ‘convenience and simplicity’ was the top expectation for loyalty programs, but flexible redemption options and ‘the ability to pay with points everywhere’ was close behind at 49 per cent and 40 per cent, respectively.
The research essentially points to the disconnected and fragmented nature of current shopping experiences, where consumers often have to stop and look up a specific loyalty app or card, double-check their available points balance and decide how many points to use for buying from a specific brand. Having to repeat this process with every brand is an obvious and long-running point of friction.
Of course, this also explains the popularity of programs like Air Miles and those offered through credit card firms that sell themselves primarily on the breadth of redemption options they make available.
It’s worth noting that AI-powered recommendations and assistance ranked extremely low on the list of modern loyalty program expectations, with only 11 per cent saying they would find it valuable.
Brands may have to concentrate first on doing a better job of communicating how programs work and making basic account management and redemptions easy before shoppers are willing to trust their use of AI. “Too many restrictions or exclusions” was the top frustration among 46 per cent, though a quarter admitted they still forget to use their loyalty programs.
This gated 14-page report provides additional data on where consumers would like to redeem their points and an appendix with a more detailed look at the data that could be worth a look if you’re looking to introduce or enhance a loyalty program in 2027.
