US rewards worth US$48bn, but 33% unredeemed

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By: Wise Marketer Staff |

Posted on April 26, 2011

US rewards worth US$48bn, but 33% unredeemed

While American consumers earn approximately US$48 billion worth of loyalty points and miles each year, a surprising one in three reward points goes unused, according to a study into the perceived value of loyalty programmes published by Colloquy and Swift Exchange.

The '2011 Forecast of US Consumer Loyalty Program Points Value' study found that, out of the approximately US$48 billion worth of perceived value in reward points and miles that American businesses issue each year, at least one-third (some US$16 billion worth) goes unredeemed by consumers.

Put in perspective, the average household that is active in loyalty programmes earns US$622 worth of points each year, yet does not redeem US$205 of that reward value - enough to buy an airline ticket, purchase a week's worth of groceries, or even to buy a smart phone.

The study examined consumer-oriented reward programmes from a range of merchants, including those from travel and hospitality, retail and financial services. Taken together, the sheer amount of currency issued by this group demonstrates the economic muscle and potential untapped benefits for all involved in rewards programmes.

"American consumers are leaving significant dollars on the table every year," said Kelly Hlavinka, managing partner for Colloquy. Consequently, according to Nancy Gordon, COO for Swift Exchange, "To help consumers make rewards-based purchases as easily as they buy anything else in their daily lives, marketers need a tool that can translate rewards and points into real 'mind share'."

Among the key findings of the new study, which was structured around the existing '2011 Colloquy Loyalty Census' study:

  • The financial services sector is the biggest provider of rewards at US$18 billion a year;  
  • The travel and hospitality sector is the second-largest industry in terms of rewards at US$17 billion a year;  
  • The retail industry, although it makes up 40% of all loyalty programme memberships, issues the smallest value in terms of rewards at only US$12 billion a year;  
  • The number of loyalty memberships in the US is estimated at some 2.1 billion, exceeding 2 billion for first time (up from 1.8 billion in 2009);  
  • The average household has signed up for 18.4 programmes, compared to only 14.1 programmes in 2009;  
  • Despite the increase in overall membership, the average number of programmes in which households actively participate stands at only 8.4;  
  • Overall membership of 2.1 billion represents a 16% increase compared to the 2009 report, but a slowdown from 2007 to 2009 when memberships rose by 34%.

Hlavinka concluded that loyalty marketers have much work to do because, while unredeemed points may translate into short-term corporate savings, they do not equate to long-term customer relationships: "If redemption equals engagement, and engagement delivers customer satisfaction and profit, then loyalty marketers should encourage their members to make the most of their rewards."

Details of both studies have been made available for free download from Colloquy's web site - click here (free registration required).

For additional information: ·  Visit Colloquy at ·  Visit Swift Exchange at