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$48 Billion Worth of Consumer Loyalty Reward Points Dispensed Each Year, Yet One-Third Are Never Cashed In

$48 Billion Worth of Consumer Loyalty Reward Points Dispensed Each Year,
Yet One-Third Are Never Cashed In

First-Ever Quantification of U.S. Loyalty Rewards Value Accompanies Release of
2011 COLLOQUY Loyalty Census


CINCINNATI and MIAMI (April 19, 2011) – Americans accumulate approximately $48 billion in rewards points and miles annually, according to the results of a first-ever study on the perceived dollar value of loyalty programs that illustrates the real economic power of these programs for consumers, issuers, merchants and manufacturers.

Out of roughly $48 billion worth of perceived value in reward points and miles American businesses issue annually, at least one-third, representing $16 billion in value, goes unredeemed by consumers, according to the study, titled 2011 Forecast of U.S. Consumer Loyalty Program Points Value.

Put in perspective, the average household that is active in loyalty programs earns $622 a year, but does not redeem $205 of those rewards.That's enough to buy an airline ticket, purchase a week's worth of groceries or even a smart phone.

"American consumers are leaving significant dollars on the table every year," said Kelly Hlavinka, Managing Partner at COLLOQUY. "This report should alert savvy consumers to a great opportunity to stretch household budgets, and to do so by simply consolidating their loyalty rewards participation with their favorite brands, making it easy to accumulate and redeem them faster than ever imagined."

The study from SWIFT EXCHANGE and COLLOQUY comprises consumer-oriented reward programs from a host 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 programs, which were launched some 30 years ago.

"Three decades after the inception of the modern frequent flyer program, the rewards industry is ripe for a transition from a culture of accumulation to one of realization in the fullest sense," said Nancy Gordon, Chief Operating Officer of SWIFT EXCHANGE. "That means helping consumers make rewards-based purchases as easily as they buy anything else in their daily lives. To accomplish this, marketers will need a transformational tool that can translate rewards and points into real mind share."

In other key findings:

  • The financial services sector is the biggest provider of rewards at $18 billion a year
  • The travel and hospitality sector is the second-largest industry in terms of rewards at $17 billion a year
  • The retail industry, although it makes up 40% of all loyalty program memberships, issues the smallest value in rewards at $12 billion a year.


This report provides an unprecedented quantification of the value of U.S. loyalty rewards. It is the result of exhaustive research and forecasting efforts by COLLOQUY, a LoyaltyOne company that is a global provider of loyalty marketing publications, education and research; and SWIFT EXCHANGE, a leading marketing technology company specializing in the rewards industry.

Hlavinka said the research results indicate loyalty marketers have work to do, because while unredeemed points may translate to short-term corporate savings, they do not equate to long-term customer relationships.

"If redemption equals engagement and engagement delivers customer satisfaction and profits, then loyalty marketers should encourage their members to make the most of their rewards," she said. "In short, redemption is good."

Findings from the 2011 COLLOQUY Loyalty Census
Forming the backbone of the forecast was the bottom-up sizing of the number of U.S. loyalty program memberships – data that is featured uniquely in the 2011 COLLOQUY Loyalty Census. Its key findings include the following:

  • The number of loyalty memberships in the U.S. is 2.1 billion, exceeding 2 billion for first time, up from 1.8 billion in the 2009 report
  • The average household has signed up for 18.4 programs, compared with 14.1 programs in 2009
  • Despite the increase in overall membership, the average number of programs in which households actively participate is just 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 34%.

Complete details of both the 2011 COLLOQUY Loyalty Census and the 2011 Forecast of U.S. Consumer Loyalty Program Points Value are available as a free download at www.colloquy.com/whitepapers.

Methodology
2011 Forecast of U.S. Consumer Loyalty Program Points Value was completed through an intensive nine-step process examining the perceived value of loyalty rewards across all industries. A mix of publicly reported data points, including reviews of corporate records, web sites and press releases, third party information, proprietary estimates and forecast assumptions were used. The report refers to the value of all points and miles as "perceived" because the worth of a reward to a consumer may vary from the actual cost of delivering the rewards to the granting company.

The COLLOQUY 2011 Loyalty Census is the result of a comprehensive review of loyalty program memberships that includes an archive of programs across major market sectors, web sites, press releases, annual reports and third-party publications. Complete details of the research on growth and trends in loyalty program memberships and activity are available at www.colloquy.com.

About COLLOQUY:
COLLOQUY® comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry. Owned by LoyaltyOne, COLLOQUY has served the loyalty-marketing industry since 1990 with over 40,000 global subscribers to its magazine and www.colloquy.com the most comprehensive loyalty web site in the world. COLLOQUY's research division develops research studies and white papers including industry-specific reports, sizing studies and insights into the drivers of consumer behavior. COLLOQUY also provides educational services through workshops, webinars and speeches at events throughout the world and is a loyalty-marketing partner of both the Direct Marketing Association and the Canadian Marketing Association and a content provider to the American Marketing Association. COLLOQUY also operates the COLLOQUY Network, a global consortium of practitioners certified in COLLOQUY's proprietary methodology. COLLOQUY magazine subscriptions are available at no cost to qualified persons at www.colloquy.com or by calling 513.248.9184.

About SWIFT EXCHANGE:
As a pioneer in global commerce, SWIFT EXCHANGE is unleashing a powerful new source of consumer buying power utilizing its patent-protected technology that blends points and miles from different rewards programs to make them as easy to spend as cash. SWIFT EXCHANGE is owned and operated by Signature Systems LLC. �For more information, visit�www.swiftexchange.com.

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Press Contacts

COLLOQUY
Jill McBride or Tim Sansbury
(513) 231-5115
jill@jzmcbride.com or tim@jzmcbride.com

SWIFT EXCHANGE
Brian Hickey
(212) 279-3115 ext 245
bhickey@cjpcom.com