Should You Cancel Your Loyalty Program? What to Try First

Canceling a loyalty program means ending it for every member: closing enrollment, setting a last date to earn and a last date to redeem, and then closing accounts. A planned, well-communicated ending is usually called a sunset. The alternatives are to fix the program, restructure it, relaunch it or move it to a new platform.

A struggling program is not always a failing one, and a failing program is not always worth saving. This guide covers the signs a program is not working, what to check before deciding, the alternatives to canceling, what canceling costs, when ending is the right call, which members are affected most, how to make the decision and how to end a program well if that is the answer.

Key Takeaways

What are the signs a loyalty program is not working?

A program is struggling when few members stay active, rewards cost more than the extra purchases they drive, or members buy no differently from similar customers outside it.

Common warning signs include:

• Low activity: many members who joined but rarely earn or redeem.
• Weak incremental results: members' spending looks no different from similar non-members once the comparison accounts for who chose to join.
• Rising cost per active member: reward, platform and service costs growing faster than member activity.
• Unused points for the wrong reasons: points lapsing because rewards are too hard to reach or not wanted, rather than through normal attrition.
• Complaints and service load: members confused by rules or frustrated by redemption problems.
• An aging platform: a system that cannot support new channels, personalization or the data the business needs.

Doubts about loyalty programs are common. In PwC's 2025 survey of 406 US executives at consumer-facing companies with $100 million or more in revenue, 57% said their loyalty systems are not delivering the outcomes they need, and the survey found that "46% of executives say their company's current loyalty program will be irrelevant in three years" (PwC). That is a reason to examine a program, not proof that it should end.

What should you check before deciding to cancel?

Before deciding, check four areas: the program's economics, member activity, the design of earning and rewards, and the operations and technology that run the program.

A program can fail in one area and work in the others. If members are active but rewards cost too much, the fix is economic; if the economics work but few members engage, the fix is design and communication. The guide to loyalty program economics covers how to measure the financial side.

What are the alternatives to canceling a loyalty program?

The main alternatives are to fix specific problems, restructure rewards or rules, relaunch with a new design, or migrate to a new platform while keeping members.

A simpler, lower-cost program, such as one with fewer rewards or member perks without points, is another middle path between restructuring and ending. Fixes can be modest. Experience-based or recognition rewards can add value without matching discounts; personalized rewards for birthdays and anniversaries give members a reason to return; and gamification can make earning more engaging. Any change that reduces the value of points members hold needs advance notice, which the guide to announcing loyalty program changes covers.

What a migration involves

Moving a program to a new platform keeps members, but it carries its own risks. Audit the data first: member records, balances, pending points, tier status and transaction history. Map the earning and reward rules to the new system, rebuild integrations with point of sale, ecommerce and customer records, and test that each member's balance and status come across correctly before switching. Keep a record of every member's position on the day of the move in case of disputes, and tell members what changes for them, such as how they sign in. Aquatrols' requirements, as its case page lists them, included the ability to "Allow for seamless transition of existing user data and point balances" and to "Relaunch quickly with minimum disruption to current users."

What does canceling a loyalty program cost?

Canceling has costs beyond the program budget: points members still hold, member reaction, lost customer data, service and communication work, and the expense of starting again later.

• Points members hold: part of the revenue from purchases that earn points is generally deferred as a liability and recognized as points are redeemed, expire or are expected to go unused, so ending a program means planning how members can use the points they hold. The guide for CFOs on loyalty program liability explains the accounting.
• Member reaction: members may see an ending, or a sharp cut in value, as taking back something they earned. Regulators have paid attention to similar issues: the Consumer Financial Protection Bureau lists devaluation among four recurring complaint themes in credit card rewards (CFPB), and the US Department of Transportation's 2024 inquiry into airline programs focused in part on "the devaluation of earned rewards" (US Department of Transportation). Neither sets rules for retail or B2B programs, but both show how earned points can be viewed.
• Lost customer data: a program identifies customers and records what they buy and what they prefer. Without it, the brand may lose that link for many customers.
• Ending work: notices, service scripts, redemption support and closing accounts all take time and money.
• Restart cost: if the brand wants a program again later, it has to rebuild enrollment, and members who felt let down may be slower to rejoin.

Keeping a failing program has costs too: rewards that do not change behavior, a platform that consumes budget and a member experience that may harm the brand. The decision is a comparison of two sets of costs, not a choice between cost and no cost.

Which members does the decision affect most?

Any change or ending hits some members harder than others: the most active members, those holding large balances or near a tier, lapsed members and, in B2B programs, partners.

Look at the membership by segment before deciding, because the average member can hide the people with the most at stake:

• Most active members: often the customers the brand most wants to keep, and the ones most likely to notice a change. Check what share of program sales they account for.
• Large balances: members who have saved points for a big reward lose the most if a program ends or values fall, so give them clear options and time.
• Members near a tier or reward: a change that moves the goal can feel like a broken promise; consider honoring progress already made.
• Lapsed members: they may not notice a change at all, which makes them a lower risk but also a group that may need a direct notice if they hold points.
• B2B partners and their staff: in channel programs, rewards can be part of how partners plan their business, so changes can affect the commercial relationship as well as loyalty.

Segment results also sharpen the decision itself: a program that loses money on average may still return more than it costs among its best members, if their incremental results hold up against a comparison group, which points toward a restructure aimed at them rather than an ending.

When is canceling the right decision?

Canceling can be right when even a redesigned program cannot return more than it costs, the business no longer needs it, or members clearly do not value it.

Brandmovers builds and runs loyalty programs, so it has a commercial interest in programs continuing; that is one reason this guide sets out plainly when ending is the better choice. Ending a program is reasonable when:

• The economics do not work even after fixes: tested changes to rewards and earning still leave incremental margin below cost.
• The business has changed: the brand is leaving a category, merging programs or changing how it sells.
• Members do not value it: low enrollment and activity persist despite clear communication and reachable rewards.
• A different tool fits better: for some goals, such as a one-time launch or a short sales push, a promotion may do the job without an ongoing program.

When ending is the answer, ending it well matters more than avoiding the decision. A clear, fair sunset can protect the relationship better than a neglected program left running.

How do you decide whether to cancel, fix or relaunch?

The decision should rest on evidence: measure incremental value against a comparison group, model each option with finance, test changes first and set decision criteria in advance.

1. Name the goal: what the program is supposed to change, such as purchase frequency, retention or first-party data.

2. Measure incremental value: compare members with similar customers who are not in the program, or hold back a group from a change. If almost every customer is a member or the program is small, a holdout from a change or a before-and-after comparison over matching seasons is the practical option; treat the result as directional.

3. Model the options with finance: include reward costs, platform and service costs, outstanding points and the cost of ending.

4. Test before committing: try the most promising fix with one segment or region.

5. Set the decision in advance: agree on the result that would justify keeping, changing or ending the program.

As an illustration: a program that costs $600,000 a year and produces $450,000 in incremental margin loses $150,000. If a redesign cuts cost by 20%, to $480,000, and lifts incremental margin by 20%, to $540,000, the program earns $60,000 a year instead, before any one-time cost of the redesign. Cheaper rewards can also lower the lift, so test the two changes together rather than assuming both. If tested changes cannot close the gap, the case for ending it is stronger. These figures are illustrative; use your own costs and measured results.

How do you end a loyalty program well?

End a program with advance notice, a last date to earn, a period to redeem, clear answers for members and a plan for their data, following the program's terms.

Announce the ending before it happens, say when earning stops and when redemption ends, and keep redemption open for a period after earning stops so members can use their points. Check the program's terms for notice commitments and whether any state rules affect how points expire, and whether points members bought or that convert to cash or gift cards are treated differently. Plan for members who hold large balances, for a surge in redemptions after the announcement (reward cost, stock and fulfillment), and for members whose balances are too small to reach any reward, for example with a low-value reward or credit. In B2B programs, tell partners and account managers first, and check partner agreements for incentives, rebates or funds already earned or committed for the current period. Decide what happens to member data under the brand's privacy notice and any state privacy laws that apply, and prepare customer service with answers before the announcement. The transition playbook covers sunset timelines, communication sequencing, migrations and relaunches step by step. This is general information, not legal advice.

Conclusion

Canceling a loyalty program should be a decision made on evidence, not frustration. Find out why the program is struggling, fix what can be fixed, consider a relaunch or migration that can keep members and their history, and weigh the costs of ending against the costs of continuing. If ending is right, end it with notice and a fair chance to redeem. What would your program need to show in the next six months to earn its place?

Sources

• Consumer Financial Protection Bureau, Issue Spotlight: Credit Card Rewards (May 2024)
• PwC, 2025 Customer Experience Survey
• US Department of Transportation, "USDOT Seeks to Protect Consumers' Airline Rewards in Probe of Four Largest U.S. Airlines' Rewards Practices" (September 5, 2024)