Consumers to spend loyalty points on gifts

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By: Wise Marketer Staff |

Posted on December 11, 2008

While US retailers await their holiday season sales results, BMO Bank of Montreal and the Canadian Air Miles reward programme have conducted a survey to provide some early insights into holiday shopping intentions.

Among the survey's main findings, it appears that a recession will definitely constrain holiday spending, with almost 20% of Canadian consumers reporting that they are stressed about not having enough money for gifts, and that they will turn to loyalty points to supplement their gift-giving.

Interestingly, despite a marked decline in consumer confidence, Canadians' gift-giving intentions haven't diminished. "Retail sales have weakened across the country compared to 2007's strong pace," explained Sal Guatieri, senior economist for BMO Capital Markets. "With the economy being likely to slip into recession, we believe this will be an extremely soft holiday spending season - possibly the softest since the early 1990's downturn - and we don't see a meaningful recovery in consumer spending until the second half of 2009."

The survey found that almost one-third of Canadians (32%) plan to spend less in the 2008 holiday season compared to 2007, citing current economic conditions as the main reason. According to the survey, Canadians are planning to spend an average of Can$736 on holiday gifts, with 65% saying they will stick to a firm holiday budget, and 74% planning to purchase gifts using cash or debit cards.

However, most consumers were hopeful that, by taking advantage of retail discounts and redeeming their accumulated loyalty points, they would still be able to buy more gifts. In fact, more than 65% of the consumers surveyed felt that it is appropriate to give gifts that were purchased with loyalty miles or points, and 40% of those who intended to redeem loyalty points for gifts said that they would not otherwise have enough money to purchase the gifts they wanted to buy.

"Given consumer confidence levels, now is the time for shoppers to take advantage of high value reward redemptions that are available within loyalty programme reward portfolios," concluded Neil Everett, chief marketing officer for Air Miles. "By doing so, they can refocus their priorities about where and how to spend their discretionary cash."

For additional information:
·  Visit Air Miles at
·  Visit BMO at