June 18, 2015
It is important to understand that all loyalty rewards and gift cards will not be redeemed. A good loyalty program or gift card management solution should enable shoppers to turn the unused ones into cash.
US consumers hold 3.3 billion memberships in customer loyalty programs, says 2015 COLLOQUY Loyalty Census. More than 75% of US adults participate in customer loyalty programs like those offered by credit card companies, hotel chains and retailers. More than $50 billion worth of perceived value in reward points and miles are issued by American businesses annually. But despite the fact that the average US household belongs to more than 22 loyalty programs, they are active in only 40% of the programs. More than 30% of the reward points and miles are not redeemed annually.
The story is the same in the case of gift cards; sales of gift cards in 2014 were at $124 billion. Advisory company CEB TowerGroup estimated that $750 million gift cards were not redeemed in 2014.
Shoppers want solutions that turn the unused loyalty points and gift cards into cash. In this article, we will discuss two programs that are doing exactly that.
Coinstar Exchange kiosks take your unused gift cards for cash
Coinstar Exchange accepts gift cards from nearly 150 retailers including Lowe’s, Best Buy, Target, Macy’s, Starbucks, etc. A customer can scan his or her unused gift cards with at least a $20 balance on them and can get 60%-85% of the balance as cash in exchange. Coinstar verifies the identity of the customer through driver's license and credit cards.
There are few other companies doing the same but the process might take few weeks and in some cases, works for only one brand. Plastic Jungle (acquired by CardCash) and Cardpool also does the same but with certain limitations. For example, Plastic Jungle pays only in exchange for Amazon gift cards and via PayPal. Cardpool will mail you a check, but the whole process can take up to a couple of weeks.
Converting unused miles into PayPal cash
PayPal account holders can redeem unused miles from the reward programs of American Airlines AAdvantage, US Airways Dividend Miles for cash through Points.com.
Canadian-based loyalty program Aeroplan is not part of the Redeem Program at Points.com which allow members to redeem their miles for cash via Points. Although a number of functionalities are available via Points (i.e. exchange, trade, redeem, buy), Aeroplan members can only exchange miles.
Points.com, part of Points International Ltd., is a rewards program management website where people can trade, exchange, earn, buy, share, gift and redeem miles and points.
Another way to reward shoppers is by developing a rewards program by which a person can earn points when buying fuel at Exxon and use the points for savings while shopping at Macy’s. Thus, it will reduce the problem of unused reward programs.
American Express’s loyalty program Plenti does exactly that.
Plenti, the first coalition loyalty program in the US
Earlier this year, AT&T, ExxonMobil, Macy’s, Nationwide, Rite Aid, Direct Energy and Hulu joined hands with American Express to launch Plenti, the first US-based coalition loyalty program featuring well-known brands. Plenti members can use any form of payment that the partner accepts at checkout – cash, credit, debit or prepaid. This means that if they have a card product with other rewards benefits, they’ll earn those rewards in addition to the points collected through Plenti.
Plenti offers plenty of ways for consumers to earn points:
Plenti members who use the featured welcome offers could earn at least 10,000 Plenti points, which is equal to at least $100 in savings.
A rewards program with cash exchange for unused loyalty program & gift cards are much required in the market. It will boost a shopper’s confidence in loyalty systems. A report in 2014 revealed that 54% of members are unhappy with loyalty program rewards from their favourite brands. On top of that, 48% have experienced frustration when attempting to redeem rewards.