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Feature Story

December 2014

Loyalty Reward Points to Go to Holiday Gifts

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Six out of 10 American shoppers intend to use points they've earned through customer loyalty programs to save money on holiday gift buying this year, according to research from Colloquy.

This represents a 22 percent increase in the number of shoppers who are planning to cash in reward points on gift purchases, compared with the 2013 holiday season.

In the Millennial demographic (ages 18 to 34), the intent to use reward points for gift buying shifts upward compared to the general population (ages 18 to 45-plus):

  • 63 percent of consumers ages 18 to 24 plan to use points on gifts in 2014, representing a 43 percent increase over last year.
  • 71 percent of consumers ages 25 to 34 say they'll cash in reward points for gifts, a 34 percent increase over 2013.

Approximately 62 percent of consumers ages 35 to 44 say they'll redeem points for gifts, a 19 percent jump over last year, and 54 percent of consumers ages 45 and older say they'll trade points for gifts, a 20 percent increase over 2013.

Colloquy updated its annual "Holiday Loyalty Shopper Study" by obtaining responses in October 2014 from 1,000 American consumers nationwide about their holiday shopping behavior.

"The amount of spending projected in the 2014 holiday season exceeds $600 billion, so 60 percent of consumers using reward points can generate a lot of redemptions," said LoyaltyOne Vice President Dennis Armbruster. "Retailers clearly have ample incentive to simplify and encourage reward redemptions and make the holiday shopping experience all the merrier for their best customers."

Here are some other key findings from the study:

  • 35 percent of shoppers plan their holiday purchases to maximize their customer reward earnings during the gift-giving season.
  • 20 percent of shoppers adjust their gift ideas based on which products offer significant bonuses and related rewards.
  • 40 percent of women and 31 percent of men say that when shopping this holiday they'll choose retailers that operate customer-reward programs in which they participate.
  • 10 percent of shoppers say that so-called "soft benefits," such as early access to a product or event, would be a strong incentive to patronize a specific store.
  • Gift cards (52 percent), coupons (49 percent) and cash-back offers (48 percent) rank highest among survey takers for encouraging shopping at a specific store.