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