What good is a credit card rewards program if you don’t take advantage of it? A survey published by Capital One Corp. found that 57% of credit cardholders have not redeemed any reward points in the past three months. Only 22% of those surveyed are satisfied with the credit card reward program they have.
The survey was conducted by BIGresearch in late March and included 1,045 people with rewards cards. Its margin of error is plus or minus 3.1 percentage points.
The primary reason listed for not redeeming credit card reward points in the last three months was the difficulty in redeeming the points for rewards. Some rewards programs have special terms and conditions that must be met in order for cardholders to cash in their points. Other programs have specific dates or time frames for processing the rewards that do not meet the needs of the cardholder looking to cash in points. Travel rewards, for example, are often subject to blackout dates.
Lack of Interest
The second main reason that cardholders are not taking advantage of rewards programs is that they do not think the reward items are attractive. Reward catalogs filled with products or merchandise that does not fit into your lifestyle or fulfill your desires makes it less likely that you’re going to cash in your points. Other programs have interesting items, but only at the highest point levels, which you may never achieve in your lifetime. While 72% of respondents said they would prefer cash rewards, only 54% have a cash-back option.
Reason for Rewards
The main reason that people participate in rewards programs, according to the survey, is because they see it as a way to earn “free money.” Free money may come in the form of cash or merchandise.
While people do like to earn things for free, if a credit card rewards program is not intriguing enough, then cardholders are not likely to participate. Reward programs are only as rewarding as cardholders perceive them to be. To increase participation, credit card companies need to evaluate whether what they are offering cardholders is meeting and exceeding their desires or falling short.