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    Bank customers quick to sign up for debit rewards programs - but slow to redeem

    CHICAGO, US: Debit rewards programs have often been touted as an easy way to gain and retain customers. However, as banks eliminate debit rewards programs as a result of changing legislation, Mintel Comperemedia surveyed consumers on their debit reward behaviour and attitudes.
    Bank customers quick to sign up for debit rewards programs - but slow to redeem

    It seems debit card programs alone aren't likely to foster customer loyalty, as 47% of respondents who participate in a debit rewards program have never redeemed their 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," says Susan Wolfe, VP of financial services at Mintel Comperemedia. "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 instil loyalty."

    Mintel Comperemedia 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) redeemers. 36% 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 their debit rewards program - further suggesting that debit rewards programs are not a strong incentive to stick with a particular banking institution.

    "Overall, rewards aren't going away, and many banks will continue to offer and promote these programs," adds Susan Wolfe. "But we will see a shift in that rewards are offered as a benefit to different levels of customers and in that way, they will become part of an overall loyalty program - rather than just a debit rewards program."

    The survey also assessed consumers' willingness to pay for a debit rewards program and found that 36% of heavy redeemers are willing to pay as much as US$4/month for their debit reward program, while 61% would be willing to pay US$1/month. Not surprisingly, it's those who redeem often who are most willing to pay extra for the benefits.

    Source: Mintel Comperemedia

    Source: Mintel

    Mintel is an independent award-winning provider of world-leading market intelligence, delivering robust information, analysis and critical recommendations. Mintel's trusted portfolio of proprietary industry solutions and products has been supporting high profile clients in key sectors such as FMCG, financial services, media, retail, leisure and education for over 38 years.

    Go to: http://www.mintel.com/
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