A study conducted by Swift Exchange and Colloquy into rewards card programs, reveals that an outstanding $18 billion worth of rewards points go unredeemed in the U.S. each year. The results of the 2011 Forecast of U.S. Consumer Loyalty Programs Points Value were reported by Colloquy.
They show that of a total of $48 billion rewards points earned, the unclaimed amount equates to one third of all points earned. In cash terms that equals $205 per annum.
Rewards points are issued by three primary sectors: the financial ($18 billion); travel and hospitality ($17 billion); and retail ($12 billion). The question naturally arises as to why so many points are earned and then never redeemed, and if consumers would be better off swapping to a rewards card which would more likely benefit them by matching the reward to something worth having.
There are many points to consider when opting for a particular rewards program. Many consumers carry a number of cards each offering rewards, which leads to a failure to redeem points across the board. Cash back rewards programs are the most coveted but according to Credit Land, a survey published in 2011 by Capital One Corporation showed only 54% of consumers actually use cash back cards.
Where cash back isn’t on offer many consumers simply fail to redeem accrued points as the rewards on offer are not attractive enough to bother with. This is of particular note when a choice of catalog merchandise is offered. Others simply forget they have accumulated points as have points spread out over a number of cards. Points earned on store cards may not add up to much if the card holder rarely shops at the particular store.
Travel rewards programs often carry black out dates making it difficult to schedule a trip. Some programs make it quite difficult for the cardholder to actually redeem the points, or impose specific time frames on accumulating and using points, which are impossible to meet.
The study emphasises that by spreading rewards points over numerous cards the consumer is less likely to redeem a reward. To benefit from rewards programs consumers should choose their card with care, paying attention to any redemption restrictions, and consider if the rewards on offer are actually personally appealing.
Concentrating spending on a particular card is more likely to result in a reward worth claiming, than having scattered points going to waste or simply expiring over several cards. It makes no sense to accrue points for something not worth having, when spending could instead be deliberately targeted to bring in a specific reward that actually personally benefits the consumer.