Debit card reward programs can lift transactions, but issuers who are now looking more closely at the costs connected to their debit card portfolios are beginning to realize that for a majority of consumers, the programs have little value and dropping them won’t drive them away. Often these reward programs are automatic (no buy in), there may be little information about them provided to accountholders (no relevancy or connection) when they first receive their card, and accumulating value can take some time (a non-starter in a real-time, always on shopping environment).
“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.”
Consumers might prefer being rewarded for a long-standing relationship, offered preferential loan treatment, or gaining access to specialized tools. This is how bank customers received rewards pre-payment card, so for many issuers it could be back to the future.
