Loyalty Program Consolidation: The M&A Playbook

Loyalty program consolidation is the process of combining two companies' loyalty programs after a merger or acquisition: choosing which program survives, converting points balances and tier status, moving member data, and telling members what changes for them.

Deal activity keeps this problem current. Writing on the Harvard Law School Forum on Corporate Governance in December 2025, Wachtell, Lipton, Rosen & Katz said US M&A volume was on pace to reach about $2.3 trillion in 2025, up 49% from 2024. When the target runs a loyalty program, whether for consumers or channel partners, the program comes with it: members, points balances, tier status and promises that the acquirer now owns. Allegiant's acquisition of Sun Country Airlines is a current example. Announced on January 11, 2026, the deal promised "expanded frequent flyer and membership benefits, combining the best of both airlines' programs," adding Sun Country's more than 2 million loyalty members to Allegiant's 21 million. When it closed on May 13, 2026, Allegiant said Allegiant Allways Rewards and Sun Country Rewards would remain separate in the near term, with members' points, benefits and account status keeping their current value. This guide covers how to choose a consolidation model, set a fair conversion rate, meet the rules that apply, communicate with members, migrate the data, and measure whether the consolidation worked.

Key Takeaways

Why is loyalty consolidation underplanned in M&A?

Loyalty consolidation is easy to underplan because a program can look like a marketing asset to sort out after close, when it is also a financial obligation and a set of promises to the target's best customers.

A loyalty program can fall outside the first wave of integration planning, yet an outstanding points balance is a liability the acquirer takes on at close, and a member's tier status reflects spending the member did because the program promised specific benefits. Treating either as a detail the new owner can change at will risks losing the customers the deal was meant to acquire.

The costly surprises tend to surface late:

• Different currency values. A point in one program may be worth noticeably more than a point in the other.
• Overlapping members. Many customers may belong to both programs, under different email addresses or name spellings.
• Incompatible tier rules. One program may qualify members on spend and the other on visits or nights, so status does not translate directly.
• Platform deadlines. One program's platform contract may be ending, which removes the option of running both programs for long.

Each of these changes the model, the timeline and what can honestly be said to members at announcement. Found in due diligence, they shape the plan. Found months after close, they force rushed decisions and messages that have to be corrected later.

What are the three consolidation models?

The three models are a full merger into one surviving program, a portfolio model in which both programs survive with shared earning and redemption, and a phased migration in which both run in parallel until members move to the destination program.

Full merger

In a full merger, one program survives and members of the other move into it at a set conversion rate and tier equivalency, after which the retired program closes. Marriott is a widely cited example. Marriott announced in April 2018 that Marriott Rewards, The Ritz-Carlton Rewards and Starwood Preferred Guest would move to one set of benefits and a single points currency in August 2018, when "SPG members will see their points balance triple," and that members could combine their accounts. The Marriott Bonvoy name replaced all three in February 2019. Allegiant's stated plan to combine "the best of both airlines' programs" points toward the same model.

A full merger is the simplest to run and removes the cost of two platforms, two catalogs and two communication streams. It fits when one program is clearly stronger in design, value and technology. The risk is that members attached to the retired program's particular features see the move as a downgrade even when the surviving program is comparable overall, so each member needs to see how their own balance and status carry across.

Portfolio model

In a portfolio model, both programs keep their identities while members earn and redeem across both brands through a shared layer. It works like a coalition currency run inside one company. The model fits when the brands serve different customers and members are loyal to the brand rather than the parent company. It costs more to run, with two platforms, two catalogs and two tier structures plus the integration between them, and if the brands are likely to merge later, it builds up work that will have to be undone.

Phased migration

In a phased migration, both programs run in parallel for a set period while the destination program is prepared and members move in groups, after which the acquired program closes. It suits large member bases, complex platforms and members who are strongly attached to the acquired program. Its value depends on a specific, published timeline. A member told the conversion rate, the tier match and the date can plan around them. A member told only that the programs will "eventually" combine has reason to redeem everything now, which can create a redemption surge the financial model did not expect.

If only one company runs a program, the task is enrollment rather than conversion: invite the other company's customers with a welcome offer and apply the same consent checks.

When is each model the wrong choice?

Each model fails when it is chosen for operational convenience rather than for what members of both programs value and what the combined business plans to become.

• A full merger is the wrong choice when the acquired program's members value features the surviving program lacks, such as a visit-based earn structure or a distinctive reward catalog, and the surviving program cannot add them before migration.
• A portfolio model is the wrong choice when the brands will combine within a few years anyway, because the shared layer then becomes a cost to unwind.
• A phased migration is the wrong choice when one platform is shutting down soon or the member base is small and clean, because a long parallel run adds cost and uncertainty without reducing much risk.

In each case, the cheaper option in year one can be the more expensive one once lost members and rework are counted.

How do you set a points conversion rate?

Set the conversion rate by valuing each program's points at what members actually get for them when they redeem, then decide how much of a margin in members' favor the combined business will fund.

Start with the accounting. Points balances are obligations the acquirer takes on at close. Under US GAAP, ASU 2021-08 requires an acquirer to recognize and measure contract liabilities acquired in a business combination, such as deferred revenue for loyalty points, under ASC 606, as if it had entered into the original contracts itself; for public companies it applies to fiscal years beginning after December 15, 2022. How that applies to a specific program is a question for the acquirer's finance team and auditors, and it belongs in due diligence. The CFO guide to loyalty liability covers the underlying accounting.

Then value the currencies. For conversion design, the useful value of a point is what members typically get when they redeem it, based on the program's actual redemption mix. The advertised value per point and the cost of rewards to the company are different numbers. As an illustration, if members of Program A typically redeem points for about 1.0 cent each and members of Program B for about 0.8 cents, one Program B point is worth about 0.8 Program A points. Whether to convert at exactly that rate, round in members' favor, or add a migration bonus is a commercial decision, but it should start from correctly valued currencies. Because that value is an average, test the rate by member segment, especially heavy redeemers of the retired program's best-value rewards, and fund a floor or bonus for any group the average leaves worse off.

Test the rate against the "worse off" question. Members, and in aviation regulators, will judge a conversion on whether anyone loses value. When the Department of Transportation set conditions for the Alaska Airlines and Hawaiian Airlines merger on September 17, 2024, it required that miles earned before conversion not expire, that every mile convert into the new program at a 1:1 ratio, that the combined airline not devalue HawaiianMiles miles, and that members' status be matched or increased. That condition is specific to aviation, but it shows how a fair conversion is likely to be judged.

Plan for the redemption surge. Members who are unsure what their points will be worth have a reason to redeem them early. Announcing the conversion rate, the tier match and the date together reduces that uncertainty, and a rate or bonus that rewards keeping points gives members a reason to stay put. Model some early redemption anyway and fund it.

What rules constrain loyalty program consolidation?

Loyalty consolidation is shaped by the programs' own terms, privacy law on transferred member data, and, in some industries, regulator conditions on the deal.

• Program terms. Check what each program's terms allow: how changes are made, how much notice members get, what happens to balances when a program closes, and whether points expire. Changes that go beyond what the terms permit carry legal and reputational risk. In B2B channel programs, participation terms often sit inside distributor or dealer agreements, so review those as well. The terms and conditions guide covers change and termination clauses.
• Member data in the transfer. Under California's Civil Code section 1798.140, transferring personal information as an asset in a merger or acquisition is not a "sale" if the information is used consistently with the law. If the new owner "materially alters" how it uses or shares that information in a way that is "materially inconsistent with the promises made at the time of collection," it must give consumers prior notice. Other state privacy laws have their own rules, so compare both programs' privacy notices before merging member profiles.
• Data security. The acquirer inherits the target's security gaps along with its member data. The Federal Trade Commission said that after Marriott acquired Starwood in 2016, "it was responsible for the data security practices of both brands," and the order it finalized in December 2024 requires Marriott to review loyalty accounts on request and restore stolen points. Assess the target's security before merging member profiles.
• Partner contracts. Co-brand credit card, coalition and earning-partner agreements may set how points are bought and converted, so check whether consolidation needs a partner's consent or a renegotiated agreement.
• Marketing consent. Email and text permissions were given to a specific brand. Confirm with counsel whether they carry over to the combined program before messaging the acquired base under the new name.
• Industry regulators. In aviation, the Alaska and Hawaiian conditions above show that the Department of Transportation has attached rewards protections to at least one airline merger. Check whether a sector regulator reviews the deal before fixing the conversion design.

This is general information, not legal advice; confirm obligations with counsel before announcing changes to members.

How should you communicate with members during consolidation?

Communicate early, specifically and honestly: tell members what is happening before it happens, show each member what changes for their own account, and say so directly when something changes in a way they will not like.

1. At deal announcement. Send a short message to members of both programs confirming the deal, stating that their points and status are safe for now, and promising details before anything changes. Allegiant took this approach when its Sun Country deal closed, keeping points, benefits and status at their current value.
2. At the consolidation announcement, well ahead of migration. Give the full picture: the conversion rate, the tier match, the timeline, anything members need to do, what happens to unredeemed balances, and what the combined program will offer that neither did before.
3. At each member's migration. Send a personal confirmation with the member's balance before and after conversion, the calculation, and their new tier.
4. After migration. Run a sequence over the first month that introduces the rewards catalog and new benefits and offers a bonus for the first earn or redemption in the new program, because early experience in the new program shapes whether acquired members stay active.

Brief customer service before each step so agents give the same answers members read. The loyalty communication guide covers the channel mix.

What does loyalty data migration involve?

Loyalty data migration means moving five kinds of member data accurately into the surviving program: identity, points balances, tier status, transaction history and preferences, including consent records.

• Identity. Name, contact details and login credentials.
• Points. Current balances, pending earn events and the ledger behind them.
• Tier status. Current tier, qualification progress and the qualification period remaining.
• Transaction history. The purchase records that drive tier qualification and personalization.
• Preferences and consents. Communication preferences, stated interests and the marketing permissions each member gave.

Identity matching is the hardest step when the programs overlap. The same person may have joined each program with a different email address or name spelling, so automated matching needs a manual review queue for uncertain matches, and combined balances should not be merged until a match is confirmed. Transaction history is a decision, not a default: keep enough to support tier qualification, personalization and dispute handling, and weigh it against the privacy principle of not keeping data longer than needed.

Cutover is the other big decision. A single cutover moves everyone on one date, which is simpler to explain but puts every member at risk if something fails. A cohort approach spreads the risk but means some members are on each system for a time, which complicates customer service. Cohorts suit very large or complex programs; a single cutover can suit smaller programs with clean data. Avoid peak trading periods either way.

A platform shutdown raises the same issues without a merger. When Aquatrols' previous loyalty vendor shut down, Brandmovers migrated and relaunched the program on BENGAGED™, Brandmovers' B2B channel incentives platform, and the relaunched program saw off-season sales increase as much as 23% at times (disclosed by Brandmovers). That was a replatform rather than an M&A consolidation, but it illustrates the value of treating migration as a relaunch. The platform migration guide, the replatforming checklist and the sunset, migration and relaunch playbook cover the technical steps in more detail.

How do you measure whether a consolidation worked?

Measure consolidation by whether the acquired program's members, especially its most valuable ones, stay active at the rate they did before the deal, not by whether the migration finished on time.

• Retention against a baseline. Compare the acquired members' activity and purchase rates in the year after migration with the same members' rates in the year before the deal, adjusting for seasonality and any price changes. Where migration runs in cohorts, also compare migrated members with similar members not yet migrated.
• High-value retention. Track top-tier and high-balance members separately, because they have the most to lose and are worth the most to the combined business.
• Redemption against forecast. Compare redemptions around the announcement with what the financial model assumed.
• Conversion accuracy. Count balance and tier errors found after migration, and the support contacts they generate.
• First activity in the new program. Measure the share of migrated members who earn or redeem within the first 30 to 60 days.
• Complaints. Watch complaint volume and themes through the transition for signs that members feel worse off.

The loyalty KPI dashboard guide covers how to track these alongside standard program metrics.

Conclusion

Loyalty consolidation is not a clean-up task after the deal. It decides whether the target's best customers stay. The work starts in due diligence: audit both programs, value both currencies, check the terms and privacy notices, and choose a model that matches the combined company's brand plans. At announcement, give members specifics. During migration, protect balances and status and watch the members with the most at stake. Allegiant has promised Sun Country members the best of both programs; members will judge that promise by what happens to their points. If your company announced a deal tomorrow, could you tell every member of the target's program exactly what happens to their balance?

Sources

• Harvard Law School Forum on Corporate Governance (Wachtell, Lipton, Rosen & Katz), "Mergers and Acquisitions: Reviewing 2025 and Looking Ahead to 2026" (December 20, 2025)
• Allegiant, "Allegiant and Sun Country Airlines to Combine" (January 11, 2026)
• Allegiant, "Allegiant Completes Acquisition of Sun Country Airlines" (May 13, 2026)
• Marriott International, "Marriott International Unveils Unified Loyalty Programs With One Set of Benefits" (April 16, 2018)
• Marriott International, "Marriott Bonvoy Kicks Off Global Marketing Campaign to Introduce New Travel Program" (February 20, 2019)
• US Department of Transportation, "USDOT Requires Alaska and Hawaiian Airlines to Preserve Rewards Value, Critical Flight Service as Merger Moves Forward" (September 17, 2024)
• PwC Viewpoint, "Acquired contract assets and contract liabilities (after adoption of ASU 2021-08)"
• Federal Trade Commission, "FTC Takes Action Against Marriott and Starwood Over Multiple Data Breaches" (October 9, 2024)
• Federal Trade Commission, Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, LLC, In the Matter of (final order, December 2024)
• California Civil Code section 1798.140 (definitions, including "sell")
• Brandmovers, Aquatrols B2B loyalty case study