Rewards Expiration & Redemption

From their origin in the 1980s to today, rewards programs in the United States have become more and more widespread, evolving into a common way for card companies to attract new customers and motivate them to use the card frequently. There is a segment of the population that is highly motivated by rewards and, in many cases, have signed up for multiple rewards cards. These programs became an expected benefit of credit cards to these consumers.

In this issue, we re-examine consumers’ rewards expiration and redemption experiences. We asked respondents if they have ever had rewards expire and if so, how they handled it; how appropriate they think their card’s expiration policy is; how they would prefer to be notified of expiring rewards; if they have ever redeemed rewards and if so, how satisfied they were with the process; what the last thing was they redeemed their rewards for (and its dollar value); if they pay a fee to redeem rewards; what channel they use to redeem rewards; and some questions relating to rewards caps. We expanded the scope of the previous survey to also explore how consumers value different points-based rewards programs by asking them to select the most valuable rewards structure from a group in order to see if they prefer to earn more points upfront or use (burn) less points when redeeming their rewards for an item of the same dollar value.

Data included in this report were gathered using a web survey administered to 430 credit card users in the U.S. during February 2010; 269 of the 430 respondents reported that they hold a special value card (defined as consumers who hold at least one general-purpose credit card that features a rewards program, affinity membership, or other benefit that is earned in exchange for card usage). In this issue, we will compare how consumers’ attitudes and behaviors have changed since the August 2008 issue of Cardbeat.