Study: One-Third of Rewards Earnings Go Unused

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  1. sobore
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    sobore Gold Member

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    http://www.creditcardguide.com/creditcards/news/credit-card-rewards-earnings-unused-stor/

    One-third of all rewards earnings go unredeemed, according to a new study by the marketing firms Colloquy and Swift Exchange.
    According to the study, consumers earn a cool $48 billion in rewards points each year. But a not-so-cool $16 billion go unused.
    To put those numbers into perspective, researchers broke the numbers down even further and found that the average American household earns about $622 a year in rewards earnings; however they only use about $417 of their points. The remaining $205 in rewards points typically go to waste, say researchers.
    $205 is enough for a cheap airline ticket, an evening out, or even better, a week’s worth of groceries for the family. So why do consumers end up leaving so much of their rewards earnings on the table?
    “One of the problems is that consumers are scattering their efforts across so many loyalty programs that they lose track,” says Jim Sullivan, a partner at Colloquy. “According to the numbers from our loyalty marketing census, the average family has 18 loyalty programs. However, they are actively engaged in only 8 of those. The others go unused and often are ultimately forgotten.”
     
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  2. milchap
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    milchap Gold Member

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    Spoilage is what the loyalty programs hope for.....
     
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  3. milchap
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    milchap Gold Member

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    From the 2009 Aeroplan annual report. They estimate one in five miles is not redeemed .

    "Breakage"

    – Estimated Groupe Aeroplan Loyalty Units sold which are not expected to be redeemed.

    Breakage is subject to estimates and judgement. Management’s current best estimate of the

    consolidated weighted average estimated breakage factor is approximately 20% (2008 - 17%).

    Breakage is recognized as revenue over the estimated life of a GA Loyalty Unit, currently 30 months

    for the Aeroplan Program, which represents the average period elapsed between the sale of a mile

    and its redemption for rewards.
     
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