Why Customers Ignore Loyalty Programs They Don't Understand

By Alva Chew · Updated 2026-11-02

In short Customers ignore loyalty programs when they cannot tell what they earn, what a reward is worth or how to claim it. A 2019 KPMG survey of over 18,000 consumers in 20 countries found 60% agree programs are too hard to join or earn in. A points program, where spend earns points and points pay for rewards, removes most of the rules a customer has to learn.

Why do customers ignore loyalty programs?

Customers ignore a loyalty program when using it costs more attention than the reward is worth to them. Joining, working out what they have earned, and finding out how to claim a reward are three separate jobs. If any one of them needs explaining, a customer who is paying for a coffee or a meal will usually skip it.

The research we could verify points the same way. It does not show that customers dislike rewards. It shows that they stop at the rules, so the fix is to cut the rules a customer has to learn.

What does the research say about programs that are too hard?

KPMG surveyed over 18,000 consumers in 20 countries and published the results in November 2019. Two of its findings describe an ignored program.

Finding	Scope	Source
60% agree loyalty programs are too hard to join and/or that earning rewards is a challenge	Global, over 18,000 consumers in 20 countries	KPMG, 2019
80% agree in Brazil and China	Same survey	KPMG, 2019
55% of consumers enrolled in programs use them a few times a month or less	Same survey	KPMG, 2019

Source: KPMG press release via PR Newswire, 26 November 2019.

This is a consumer survey about loyalty programs in general, mostly large retail and brand programs. It tells you how common the complaint is. It does not tell you what share of your own customers are confused, so treat it as the direction and measure your own shop.

What happens when members join but never redeem?

A member who never redeems has taken the sign-up step and then lost the thread. A study of one international home and hardware retailer shows how large that gap can be in a plain program.

Finding	Scope	Source
Customers redeemed in only 3% of purchases	One Latin American retailer, 1% of spend earned as points	Stourm, Bradlow and Fader, 2015
60% of customers never redeemed in the observation period	Same program, customers who joined in January 2008, followed for 43 months	Stourm, Bradlow and Fader, 2015
Redeeming was a low-effort step: show the card, tell the cashier	Same program	Stourm, Bradlow and Fader, 2015

Source: Stourm, Bradlow and Fader, Journal of Marketing Research, April 2015.

Read this with care. The program was a simple one with a clear earn rate and an easy redemption step, and the authors conclude that hoarding was driven mostly by cognitive and psychological motives. So the study does not prove that confusion alone causes non-redemption. It does show that even a plain program can sit unused for years, and that a complicated one starts from a worse position.

How do complicated redemption rules lower a reward’s value?

The US Consumer Financial Protection Bureau studied credit card rewards in 2024. Credit cards are not cafés, but the finding about perceived value applies to any program with a redemption step.

The CFPB reported that redemption difficulty and devaluation were among four recurring complaint themes. It also wrote that in earlier focus groups, consumers said they found the redemption process more complex, opaque or time-consuming than they had assumed, and that this additional difficulty reduced the perceived value of rewards.

Source: CFPB Issue Spotlight on credit card rewards, May 2024.

For a small business, the lesson is practical. A reward that takes extra steps to claim is worth less to the customer than the same reward claimed at the till. You pay the full cost of the reward and get a fraction of the goodwill.

Which parts of a program do customers most often fail to understand?

From the research above and from how programs are built, four places cause trouble. Check your own program against each.

The earn rule. If the customer cannot say what they earn from a purchase, they cannot plan their next visit. Earning in proportion to the amount spent is easy to repeat. See how to set your points earn rate.
The reward’s value. A balance of 480 points means nothing until the customer knows what 480 buys. Name the reward and the number next to each other.
The claim step. If redeeming needs a code, a form or a special day, many members never try. It should happen at the till in the same moment as payment.
Extra layers. Tiers, expiry dates, bonus multipliers and stamp-count rules each add something to learn. Stamp cards and tiered programs both do this, and the points version of the same offer asks the customer to learn less.

How do you test whether customers understand your program?

You can do this in a week without any software.

Ask the one-sentence question. Ask five regulars how they earn and what they get next. If answers differ, the program is not clear.
Count joins against first redemptions. If many members join and few ever redeem, look at the reward and the claim step first.
Watch the till. Time a redemption. If it takes longer than paying, staff will avoid offering it.
Check the first visit after joining. Members who return once after joining have seen what a point does. Track that return rate, as described in how to measure loyalty program success.

How do you fix a program customers ignore?

Remove before you add. Start from the simplest version a customer can repeat from memory and change one thing at a time.

Set one earn rule based on spend, for example 1 point per US$1.
Name one first reward at a distance a regular can reach in a few visits. Loyalty rewards customers actually redeem covers how to choose it.
Make joining one scan, as explained in how to get customers to join your loyalty program.
Put the balance where the customer already looks, on their phone, and let staff redeem at the counter.
Tell every customer the rule in one sentence at the till.

The wider argument for keeping the rules to a minimum is in the case for points-only loyalty.

Where Gimify fits

Gimify is a points-only programme, so the customer-facing rules are short: spend, earn points, redeem points. Customers join by scanning a QR code and entering their email, the card sits in Google Wallet with a live balance, and staff add or redeem points on any phone at the counter. The free plan covers one outlet with unlimited members.

Questions owners ask

Why do customers not use loyalty programs?

The most common reason in the research we could verify is effort. In KPMG's 2019 survey, 60% of consumers globally agreed that programs are too hard to join or that earning rewards is a challenge. When joining, earning or claiming takes more than a moment of thought, many customers stop trying.

How do I know if customers do not understand my program?

Ask five regulars to explain in one sentence how they earn and what the next reward is. Count how many join but never come back to redeem. If most members have a balance and nobody redeems, the reward is probably unclear or too far away.

Is a low redemption rate always a sign of confusion?

No. Some customers save points on purpose, and research on one retailer's program found that hoarding was driven mostly by cognitive and psychological motives, not only by rules. A low rate is a signal to check clarity first, then reward size and distance.

Will adding more rewards or tiers fix an ignored program?

Usually it adds more to learn. Each tier, expiry rule or bonus is another thing a customer has to understand before it affects them. Fix the plain version first, so that one purchase earns a number of points and one number of points buys a named reward.

What is the simplest program a customer will understand?

Spend money, earn points in proportion to the amount, and exchange points for a reward the customer can name. Customers already understand spending and earning from everyday life, so there is little to explain at the counter.

Does a loyalty program need an app?

Not with a QR sign-up. With Gimify, customers scan a code, enter their email and the card sits in Google Wallet, so there is no app download and no password.