Up to 84 per cent of US consumers would use a points-based loyalty currency if it was offered to them, according to loyalty network Engage People.
Engage People commissioned a new survey from The Wise Marketer: ‘Paying with Points – Tomorrow Is Too Late’. The report examined consumer perspectives on using loyalty currency for redemption online and in stores to realise its potential value.
The survey questioned 1,000 US-based consumers in October 2023. It revealed a strong appeal for Pay with Points (PwP) as a redemption option. It found a greater proportion were in favour of the concept than The Wise Marketer’s 2022 Rewards Redemption Survey: US Consumer Attitudes and Preferences, which found that 80 per cent of respondents would be likely to use pay with points if available in.
Meanwhile, 76 per cent of consumers expressed a willingness to change credit cards to access improved PwP benefits. This inclination is particularly notable among those with retail cards, showing a stronger desire to change cards for the perks of PwP compared to bank cardholders.
Len Covello, CTO of Engage People, discussed the significance of the findings: “This year’s findings underscore continued growth in demand from consumers for reward programmes that offer the ability to pay with points, and a strong interest in utilising reward points for essential, every-day expenses like groceries, online shopping, fast food, and gas.
“Retailers have a unique opportunity to enhance their loyalty programmes by customising them to include better redemption options through point accumulation, and meet the evolving preferences and needs of their customer base.”
An opportunity for banks and retailers alike?
The Wise Marketer survey also found that the primary motivation for using PwP is to save money and combat inflation by reducing purchase expenses. When indicating preferred redemption locations, respondents mainly selected grocery stores (62 per cent), online retail (56 per cent), gas stations or convenience stores (52 per cent), and fast-food restaurants (45 per cent) for utilising their loyalty points.
Around 37 per cent of respondents reported having used PwP at least once, while 43 per cent were either aware of PwP but had yet to encounter it or were unfamiliar with it as a payment choice. This presents a notable opportunity for banks, retailers, and their partners to leverage the growing demand for PwP in their loyalty and rewards programmes, particularly in key redemption locations.
Mike Capizzi, dean of The Loyalty Academy, led the research and said: “Pay with Points is a format that over the past few years has marked a significant shift in the way customers interact with loyalty programmes and payment options. PwP represents a convergence of reward systems and transactional processes, offering customers a novel and potentially appealing way to utilise their accumulated loyalty points directly at the point of sale.”