Programs that reward consumers when they use their debit cards have been largely considered one of the important casualties of the Durbin amendment's cap on debit interchange.
But a recent study conducted by business research firm Mintel Compermedia found that 47% of consumers surveyed who participate in a debit rewards program have never actually redeemed their rewards points.
“Obviously, a couple different types of people fall into the group who never redeem debit rewards points–some are saving up for something bigger, while others simply haven’t accumulated enough points,” said Susan Wolfe, vice president of financial services at Mintel. “However, a number of people participate in a debit rewards program because it’s so easy to sign up but never use the program again. If so, it indicates that the rewards program isn’t working as a way to instill loyalty.”
The firm segmented survey respondents into three groups: heavy (redeem about once a month), medium (redeem every few to every six months) and light (redeem once a year). Thirty-six percent of heavy redeemers and 30% of medium redeemers, compared to 55% of light redeemers, would continue to use their debit card the same way if their bank eliminated debit rewards, suggesting that debit rewards programs are not a strong incentive to stick with an institution. But Wolf suggested that the data do not show that debit rewards programs are going away. They are likely to be absorbed into other loyalty programs.
