Loyalty Program Members Want More Accessible Redemption Opportunities

PLEASANTON, Calif. — Members of loyalty programs say they want more accessible redemption opportunities and prefer to redeem their points at least once a year, and want to redeem their points well before hitting $100 in reward earnings, according to research commissioned by Blackhawk Network, a global financial technology company.

A reward card is the most popular reward option, especially among younger generations, according to the e-book "A Heart-to-Heart About Increasing Loyalty." More than 1,500 American adults were surveyed on their preferences and attitudes toward loyalty programs across a range of categories, including:

• Retail
• Airline
• Hotel
• Food and beverage
• Online retail
• Bank
• Gym
• Telecom
• Utility

Key research findings include:

The average consumer belongs to six loyalty programs, but is only active in four. Nearly nine in 10 consumers (87 percent) belong to at least one loyalty program and estimate that they belong to 6.2 programs on average. However, they report that of all the loyalty programs they participate in, they are only active in 3.9 programs on average.

Consumers want more redemption opportunities. The highest engagement is seen in members of food and beverage, online retail, gym and retail programs, with approximately nine out of 10 surveyed loyalty members in each category reporting that they redeem their loyalty points at least once a year. Additionally, a majority of surveyed members in those categories consider themselves frequent redeems who cash in their loyalty points four or more times per year.

Only surveyed members of airline and/or hotel chain loyalty programs usually wait until they have at least $100 in rewards to redeem their points. In other categories, most members prefer to redeem well below that amount, particularly members of online retail (85 percent), utility (76 percent), phone (75 percent) and bank (68 percent) programs.

The digital divide in reward preference. Overall, loyalty program participants prefer reward cards over other reward options. More than half of surveyed consumers opted for a prepaid or gift card. Reward cards are most popular for online retailers (70 percent), phone companies (65 percent), utility companies (61 percent), retailers (56 percent) and banks (56 percent).

However, consumers are divided on whether they prefer physical or digital rewards, with research showing there is demand for both options, as well as gifts and prepaid cards.

"Effective loyalty programs keep participants engaged and continuously coming back for more. Our research found that participants in programs with the highest engagement are redeeming their loyalty points at least once a year, and in some categories, the majority of consumers are redeeming at least four times a year," said Theresa McEndree, vice president of marketing for Blackhawk Network.

"Combined with the fact that most consumers want to redeem their rewards well before the $100 mark, our findings suggest that retailers and organizations can increase consumer engagement with their loyalty program by simply offering the right rewards at the right values," she added.

The e-book is available for download here.