April 23, 2024

Bucks: All About Your Unused Reward Points

Pop quiz time.

First of all, guess the value of the frequent-flier miles, hotel rewards, credit card points and other loyalty program currency that Americans earned in 2010.

The answer? About $48 billion, according to a new joint study from Colloquy, a loyalty marketing research company, and Swift Exchange, a new company aiming to make it easier to blend and spend points from various programs. And that doesn’t include cash discounts that grocers and other retailers often offer.

Now, try to figure out how many points will ultimately go unredeemed.

The answer? Nearly one-third, the companies figure.

This is a sad state of affairs given the money at stake. The average household earns $622 a year in miles and points and such, so missing out on a third of that means that over $200 has gone to waste.

But it’s also not surprising given that the average household has 18 loyalty program memberships. Who can keep track of it all (especially all of those expiration dates in points programs that don’t bother warning you that your currency is about to evaporate)?

Companies could make this easier by making their points more interchangeable. But there are few nationwide loyalty programs of note where you can earn the same currency from competitors within industries and companies in different industries, all of which accrues to a common account. Upromise is one exception.

Companies could also make instant redemption easier. We here on Bucks recently engaged in some mild complaining about OpenTable’s insistence on handing out rewards in the form of a paper check.

As for consumers, the age-old advice persists: consolidate your spending in a few programs that deliver the biggest return, as long as you aren’t spending more in the first place or going too far out of your way to do so.

Or perhaps you have some new advice?

Article source: http://feeds.nytimes.com/click.phdo?i=770fea4b6f50f7a625217174a1d70fd4

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