BLOYL Customer loyalty Platform
Enterprise customer loyalty platform for engagement, promotions, and rewards
How To Ensure Customers Benefit From Their Loyalty Program Points
How to Ensure Customers Benefit From Their Loyalty Program Points
Most people who join loyalty programs have lost out on rewards at some point. The points that go unredeemed, the punch cards never finished and eventually thrown out, the forgotten balances that expire and disappear from an account. It happens at enormous scale: by Bond Brand Loyalty's estimates, consumers are sitting on the order of 100 billion dollars in unredeemed loyalty value, and the gap has not closed with time. Bond's 2026 research found that a significant share of members redeem just once a year or less, a sign that the friction is at redemption, not enrollment. That is a mountain of free rewards left on the table, and for the brands running those programs, it is a warning sign worth paying attention to.
If you run a loyalty program, you should be tracking program utilization and member activity as part of your performance metrics. If you are seeing dips in redemption, that can be an early indicator of bigger issues. This guide explains why redemption rates matter, how to increase them, and how to think about the perennial question of whether points should expire.
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Key Takeaways
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Why Point Redemption Rates Matter in Loyalty Programs
Why do loyalty points go unused, and if you are a loyalty program operator, should you care? After all, if no one redeems, there is no redemption cost to you, so is it better for customers to accumulate points and never spend them? Not at all. Point breakage, the term for the portion of loyalty points that go unredeemed, plays a critical role in the success and perception of a program. High breakage might look beneficial at first because it reduces the liability of outstanding points, but it usually signals deeper issues that undermine the program.
Every program has some level of breakage, but little to no redemption among your members is a bad sign. When members sign up yet never complete the final step of the earn-and-redeem cycle, something is keeping them from fully participating. That failure to redeem often indicates a lack of engagement or dissatisfaction, which is a problem when customer engagement is a core program goal, because low participation eventually leads to churn and abandonment. A loyalty program exists to support the customer behaviors that drive real loyalty and revenue growth, so if your data shows members holding large balances with very low redemption, that is the moment to investigate why.
How to Increase Point Redemptions Among Members
If redemption is running slow, you do not need to overhaul your point structure or rewards immediately. Often the fixes are simpler than expected, and they start with removing friction.
Make the redemption process easy to understand
Simplicity is essential in loyalty program design, including how members earn and redeem. The more barriers there are to using points, the less likely members are to redeem, so the redemption process should involve minimal steps and be clearly explained on your program site and in your how-to materials. Before changing anything structural, confirm that a first-time member could understand and complete a redemption without confusion.
Make it easy for members to find their point balance
Customers are busy, with countless demands on their attention, so make it as easy as possible for members to see their balance without hunting for it. Displaying the balance on the member's profile or dashboard, alongside their current rewards tier, makes it easy to find and easy to track progress, and you can personalize it further by showing earned rewards, badges, or achievements. Surfacing the available points total in the rewards catalog (in a top banner or sidebar) helps members shop for rewards within range and plan toward higher-value redemptions.
The beauty retailer Sephora is a good public example. Through its Beauty Insider program, members can see how many points they would earn from the items currently in their cart, along with their resulting balance and how close it brings them to the next tier. Making the value of a purchase visible in the moment is a powerful redemption and purchase motivator.
Send balance updates, reminders, and milestone nudges
Members sometimes simply forget they have points to spend. Regular account summaries help: automated monthly or quarterly emails with updated balances show members what they earned in the period and how much they have available to spend. Tier-progress notifications are especially effective, since alerting a member that they are close to the next tier can motivate a purchase and keep your brand top of mind. And whenever you refresh the rewards catalog, announcing new rewards, perks, or benefits can be exactly the prompt a long-time member was waiting for to finally redeem.
Brandmovers Case study: engagement is what keeps points redeemingThe principle. Redemption follows engagement: members who stay actively involved with a program keep moving through the earn-and-redeem cycle, while disengaged members let points lapse. Two Brandmovers programs show engagement designed in from the start. These are Brandmovers client programs, cited as first-party documentation. Signia. Brandmovers built Signia's program on the BLOYL platform with dynamic segmentation and personalized engagement journeys, delivering relevant guidance and offers to different member groups. The result was 15 percent unit growth and an 87.3 percent recurring engagement rate, the kind of sustained participation that keeps members redeeming rather than accumulating and forgetting. A nutritional CPG brand. Brandmovers designed an activity-based program (missions, challenges, social participation, and referrals, with receipt validation) that rewarded engagement, not just purchases. It drove a 62 percent engagement rate and a 3x increase in transactions per user, keeping members active in the program and its rewards. |
Should You Let Loyalty Program Points Expire?
This is a common and genuinely debated question, with reasonable arguments on both sides. For businesses, point expiration can help manage liability and encourage ongoing engagement by requiring points to be used within a set period. But if it is handled poorly, expiration can create customer dissatisfaction and a perception of lost value that damages loyalty and retention. Whichever route you choose, have strategies in place to keep customers redeeming.
If you choose to let points expire
Provide ample warning. Clear communication of expiration terms and frequent reminders significantly improve the member experience, so make the details plain, give plenty of advance notice when points are at risk (for example, due to account inactivity), and send reminder emails ahead of expiration dates. Include easy ways to avoid losing points, such as making a small purchase or redeeming for a modest reward, so the message feels helpful rather than punitive. A pending-points approach, where recently earned points settle before becoming fully available, can also help manage liability without surprising members.
If you choose not to let points expire
Use targeted promotions to keep redemption active. Encouraging members to redeem through special offers keeps balances moving even without an expiration deadline. For example, you might run a limited-time promotion that discounts the point cost of certain catalog rewards; members who want the most value from their points will act on it. The goal either way is the same: keep members engaged in the earn-and-redeem cycle so their points stay meaningful.
For most members, the rewards are one of the best parts of participating. If yours are not redeeming, it is worth taking the time to evaluate the program, because the fix is often simpler than a full redesign. Helping customers redeem leads to happier participants and a more valuable loyalty program overall.
Conclusion
Unredeemed points represent enormous unrealized value, and for the brands running those programs, low redemption is a signal worth heeding rather than a liability to quietly enjoy. The good news is that lifting redemption rarely requires a costly overhaul. Removing friction from the redemption process, making balances easy to see, and communicating proactively about balances, tiers, and new rewards are low-cost changes that remind members of value they have already earned and keep them active.
Underneath the tactics is a simple truth: engaged members redeem. As the Signia and nutritional CPG programs show, designing for genuine engagement, through personalization, relevant rewards, and non-transactional participation, is what keeps points flowing through the earn-and-redeem cycle. Help your customers benefit from the points they have earned, and you end up with happier members and a more valuable program.
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Want to Boost Redemption and Engagement in Your Program? Brandmovers helps brands lift redemption and engagement through loyalty program design, personalization, segmentation, and communication tools on the BLOYL platform, turning idle point balances into active, valuable participation. Get in touch with the customer loyalty and rewards team at Brandmovers today to learn how to help your members get the most from their points. |
Frequently Asked Questions
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It is usually a warning sign, not a benefit. High breakage can look attractive because unredeemed points reduce the liability on your balance sheet, but very high breakage typically means members are not engaged enough to redeem, and disengagement leads to churn and program abandonment. A healthy program has some natural breakage from ordinary attrition, but relies on active engagement and redemption rather than on customers forgetting their points. Treat redemption rate as a health metric: a sustained decline is a signal to investigate, not a cost saving to celebrate.
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Start with friction, not structure. Confirm that the redemption process is simple and clearly explained, and make each member's point balance effortless to find, on their dashboard and in the rewards catalog. Then add proactive communication: monthly or quarterly balance updates, notifications when a member is close to the next tier, and announcements when new rewards launch. These low-cost changes remind members of value they have already earned and often lift redemption without any change to the underlying point economics.
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There is no single right answer; it depends on your goals and how well you communicate. Expiration can help manage liability and prompt engagement, but handled poorly it creates a perception of lost value that damages trust. If you use expiration, give ample advance warning, send clear reminders, and offer easy ways to avoid losing points. If you do not use expiration, use periodic promotions to keep redemption active so balances do not simply sit idle. The deciding factor is less about the policy itself and more about how transparently and helpfully you manage it.
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They are tightly linked: engaged members redeem, and redemption in turn reinforces engagement by delivering the value that keeps members participating. That is why programs designed for genuine engagement tend to have healthy redemption. Brandmovers' Signia program, for instance, reached an 87.3 percent recurring engagement rate through segmentation and personalized journeys, and a nutritional CPG program reached 62 percent engagement by rewarding non-transactional activity. In both, designing for engagement kept members moving through the earn-and-redeem cycle rather than accumulating points and letting them lapse.