Why Customers Don't Redeem Their Points, and What to Do

By Alva Chew · Updated 2026-11-04

In short Customers leave loyalty points unredeemed mostly because redeeming feels like a cost, not because it is hard. In one study of a points program, 60% of customers never redeemed in 43 months, even though redeeming took one sentence at the till. Make the balance visible, keep the reward close and say what a point buys in plain numbers, and never add rules that make the balance feel at risk.

Why don’t customers redeem their points?

Customers leave points unspent because spending them feels like a loss, even when claiming is quick. The strongest evidence we could verify comes from a study of one retailer’s points program in which redeeming meant showing the card and telling the cashier. Most customers still never did it.

The causes fall into three groups. Spending points has an effort cost in the customer’s head, points are not valued like cash, and the reward can feel too far away or too unclear to bother with. Each one points to something you can change at the counter.

How many customers never redeem?

In the one detailed public study we could open, the answer was most of them. Stourm, Bradlow and Fader followed a cohort of customers who joined a retailer’s points program in January 2008, for 43 months.

Finding	Scope
Customers redeemed in 3% of purchases	One Latin American home and hardware retailer, 1% of spend earned as points
Redeeming could cut the basket price by nearly 30% on average	Same program
60% of customers never redeemed, 40% redeemed at least once	Cohort that joined January 2008, 43 months
Of customers still buying in 2011, 51.6% had never redeemed	244 customers with more than three years of history
Redeemers had baskets 25% larger and visited 141% more often	Association, not proof that redeeming caused it

Source: Stourm, Bradlow and Fader, Journal of Marketing Research, April 2015, read from the paper on 4 November 2026.

Treat these figures as one example from a hardware chain, not a benchmark for a café. The program also capped rewards at 50% of the basket, and the authors note that cap may have affected 40% of redemptions. The finding that matters for you is the pattern, not the exact percentage.

Is it because redeeming is hard?

Not mainly. The authors describe redemption in this program as low effort. Customers could check their balance at the register, online or by phone, and expiry was not a pressure because any purchase pushed the expiry of the whole stockpile back a year.

They tested what lay behind the hoarding with a model that separates three motives.

Motive	What it means	Example
Economic	You give up something by redeeming	This program paid no points on trips where the customer redeemed
Cognitive	Redeeming feels costly, even when it is one click	Having to decide, remember or ask
Psychological	Points and cash are mentally kept apart	One interviewed customer said redeeming “makes me feel sad because I don’t have any points left on my card”

Source: same paper. Their conclusion is that behaviour in this data was driven mostly by the cognitive and psychological motives.

A separate global survey found a related problem upstream. KPMG’s 2019 survey of over 18,000 consumers in 20 countries reported that 60% agree loyalty programs are too hard to join and/or earning rewards is a challenge, and that 55% of enrolled consumers use them a few times a month or less.

Source: KPMG via PR Newswire, 26 November 2019. A consumer survey of programs in general, so it shows direction and not your own redemption rate.

Which fixes raise redemption?

The same paper tested three hypothetical changes on the retailer’s data. The numbers are model predictions over an 11-month out-of-sample period, not results from a real rollout.

Change tested	Motive it targets	Predicted redemption rate
Current program	None	3.5%
Pay points even on trips where the customer redeems	Economic	4.1%
Allow points to cover up to 100% of the basket, not 50%	Psychological	6.6%
Automatic discount whenever the stockpile passes 15 points	Cognitive	21.0%

Source: Stourm, Bradlow and Fader, Table 9, JMR 2015.

Removing the decision did far more than adjusting the economics. The automatic option also reduced outstanding points the most, but it pays out more in rewards, so cost it before copying it. The practical reading for a small shop is that the fewer choices a customer has to make at the till, the more points get spent.

Does expiry make customers redeem?

It can push some, and it can cost you elsewhere. Dorotic, Verhoef, Fok and Bijmolt studied 3,094 members of a loyalty program where customers chose when and how many points to redeem and nothing expired. Deciding to redeem lifted purchases both before and after the redemption, even for partial redemptions. The authors call this redemption momentum and advise firms to avoid point expiry and binding redemption thresholds if they want to encourage purchases.

Source: Dorotic, Verhoef, Fok and Bijmolt, International Journal of Research in Marketing 31(4), 2014, abstract read 4 November 2026.

This matches what the US Consumer Financial Protection Bureau heard about credit card rewards. Its 2024 review lists redemption difficulty and devaluation among four recurring complaint themes. Focus groups found redemption more complex, opaque or time-consuming than people expected, which reduced the perceived value.

Source: CFPB Issue Spotlight, May 2024.

So an expiry rule that makes a balance feel at risk can work against the goal. The breakage page explains what unspent points mean for your accounts, and the points-only case covers why fewer rules help.

What should you change in your own shop?

Start with what the research suggests customers feel at the counter.

Show the balance. A customer who knows the number can judge how close the reward is. A reward that feels distant gets ignored.
Name the reward in plain money. State what a point buys, for example 100 points for US$5 off. The redemption rate page shows how to express this.
Remove minimums that block small balances. The first reward should be within a few visits for a regular.
Let staff offer it. The cashier can say “you have enough for a free drink today” so the customer need not remember to ask.
Skip extra rules. Tiers, bonus days and expiry add things to learn.

The reward ideas guide shows which rewards cost you least. The guide on customers ignoring programs covers the joining and earning stages, and the earn rate guide helps you set the points a reward costs.

How do you measure whether it is working?

Take the points issued in one month and track how many are redeemed over the next three to six months. Count members with a balance who have not redeemed for 90 days. Compare both before and after any change. No public benchmark fits a small café or shop, so your own trend is the only fair comparison.

Check the cost as well. A higher redemption rate means more rewards paid out, so it should be paired with the give-back percentage you chose when you set the earn rate.

Redeeming points in Gimify

In Gimify, members keep their card in Google Wallet with a live balance, so the number is one tap away. Staff add or redeem points on any phone at the counter, and the free plan covers one outlet with unlimited members.

Questions owners ask

Why aren't my customers redeeming their loyalty points?

The research points to three causes: redeeming feels like an effort even when it is quick, points are mentally treated as something different from cash, and the reward feels far away or unclear. In KPMG's 2019 survey, 60% of consumers also said programs are too hard to join or earn in.

Is a high number of unredeemed points a problem?

For your accounts it lowers what you pay out. For the relationship it is a warning. In the one retailer study below, customers who never redeemed bought less often and in smaller baskets than customers who redeemed at least once. That shows association, not cause.

Should I make points expire to push customers to redeem?

Think twice. A 2014 study of 3,094 members found that deciding to redeem lifted purchases before and after the redemption, in a program with no expiry. The authors advise avoiding point expiry and binding redemption thresholds. If you do use expiry, announce it at sign-up and warn members first.

What redemption rate should I aim for?

There is no reliable benchmark for a café or shop. Published rates come from single large programs and say little about yours. Measure the share of issued points redeemed over the following months in your own program, then watch whether it rises after you simplify the reward.

Does making redemption automatic work?

In a model run on one retailer's data, automatic redemption raised the predicted redemption rate from 3.5% to 21.0%, far more than any other change tested. It is a prediction from a model, not a field test, and automatic discounts also cost you more in rewards paid out.

Why do some customers save points for years?

Some treat points as a treat fund or want to keep their options open. Researchers who studied one retailer's data found hoarding was driven mostly by cognitive and psychological motives, not by the points' dollar value. A clear, nearby reward helps these customers choose a moment to spend.