Faced with reward program overload, some consumers are opting out — at the risk of busting their budgets.
Loyalty program memberships are up 27 percent from 2010, to a total 2.65 billion last year, according to the 2013 Colloquy Loyalty Census to be released Monday. That works out to an average 21.9 memberships per household, up from 18.4. But consumers aren't quite as loyal — they're active in just 44 percent of those programs, a drop of 4.3 percent from 2010. Participation in some kinds of programs is also down, with 1 percent fewer grocery program members and a 21 percent drop in fuel and convenience store memberships.
As more companies and retailers debut loyalty programs, it's increasingly tough to get shoppers' attention, said study author Jeff Berry, research director for Colloquy. "Most programs seem to be all about the same kind of rewards," he said.
Or as Phil Lempert, chief executive of shopping strategy site SupermarketGuru.com, puts it: "They're boring." Shoppers have little incentive to change their shopping habits, especially with program fine print that often makes earning and redeeming tough.
In the supermarket and gas station realm, for example, many chains have been promoting programs that offer gas discounts based on a shopper's grocery spending. Giant Eagle club members earn 10 cents off per gallon on a single fill-up for every $50 spent in stores, for example. Safeway customers earn a point per dollar spent on groceries and pharmacy purchases, redeemable in 100-point increments for up to $1 off per gallon on a single fill-up.
But in most gas-grocery programs, points earned expire monthly. They may be redeemable only at particular stations that may or may not have the best prices in the area, limiting the value of a 5- or 10-cent discount per gallon. "Those kinds of programs are hitting on the right utilitarian view, but there's a level of complication," Berry said.
The result for many shoppers has been to throw their loyalty behind a credit card rather than a store program. Financial services loyalty program participation rose 28 percent, to 548.4 million memberships in 2012, according to Colloquy.