The Wise Marketer Study: Rewards, Discounts, Free Shipping Drive Loyalty Signups

Inflation is driving customers to more cash-oriented redemption options, the study finds, but merchandise holds up surprisingly well.

Gift cards and discounts, always preferred in loyalty program redemptions, have gained even more traction in the latest Wise Marketer survey conducted during a period affected by the pandemic and inflation. Merchandise awards performed better than the researchers expected.

The 2022 Rewards Redemption Survey US Consumer Attitudes and Preferences is produced by The Wise Marketer, an international loyalty, research, and education organization, and Engage People, a loyalty platform supporting pay with points programs. The survey was conducted in August 2022 among 500 US consumers using an online research panel. According to the report publishers, respondents were carefully balanced between gender, age, income, and geographic region; all were members of at least one loyalty program and had made a redemption within two years.

While the authors say it is no surprise that gift cards came first (54%) and discounts second 49%)—cash or cash equivalents have always ranked at the top of the redemption options list in loyalty research—both record preference scores that are higher than normal. “Our research team believes that cash/cash equivalents both received a boost from the survey timing amidst the inflationary environment.”

Cash-like rewards are easy to see and understand among consumers, especially when prices are rising for many goods and services, the report states. Familiarity has also increased as many programs have adopted one or both as lead or solo redemption options in the recent past.

Merchandise (42%) was ranked better than expected, they say. Long a mainstay in the redemption “catalog,” they say merchandise has lost some luster in recent years as points value has diminished and actual retail prices for the typical catalog merchandise being offered have dropped. “Enter the inflationary backdrop and members may perceive that free merchandise redeemable from loyalty programs is still an attractive option vis-à-vis rising retail prices.”

Of pay-with-points programs, “approximately 80% of respondents said they would be highly (36-44%) or somewhat likely (37-42%) to use the method if available to them. Both transactions in physical stores and e-commerce purchases reveal similar likelihood to use scores, the authors say.

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