Despite the growing popularity of loyalty programs, Canadian consumers are hoarding about $16 billion worth of unredeemed loyalty points, according to a new report from Bond Brand Loyalty.
More than half the loyalty program members did not even know how many points they were carrying on their various rewards cards, and 41 per cent were unaware of their points’ value, according to the survey.
Loyalty point redemption was highest among programs offered by retailers such as drug stores, grocery chains, as well as gas and convenience stores. Those programs also scored high in customer satisfaction. Loyalty programs offered by packaged goods companies and bank-branded cashback programs scored low in satisfaction and also had low redemption rates.
“Consumers love loyalty programs and continue to join more every year, but active engagement rates have remained flat in the past four years,” said Bob Macdonald, President and CEO of Toronto-based Bond Brand Loyalty in a release.
Shoppers typically belong to more than a dozen loyalty programs – up from about nine just four years ago. Yet consumers only actively engage with only six out of 10 of those memberships, according to the study.
While companies continue to increase their spending on loyalty programs, there is much room for improvement. Only 12 per cent of members said they feel they are treated better than customers not enrolled in the program.
Some of the top Canadian loyalty programs included Amazon Prime, President's Choice PC Plus, Petro Canada Petro-Points, and Porter Airlines’ VIPorter. The seventh annual consumer loyalty report looked at more than 400 programs and 28,000 consumers in both the United States and Canada.
Loyalty programs have been in the spotlight after Air Canada (AC.TO) announced earlier this month it was ditching its longtime Aeroplan rewards program and would establish its own program in 2020. Shares of Areoplan owner Aimia (AIM.TO) have lost nearly three-quarters of their value on the news.
Editor's Note: An earlier version of this story inaccurately reported the value of North Americans' unredeemed loyalty points. While Canadians have $16 billion worth, Bond Brand Loyalty estimates Americans have US$100 billion.