Why Customers Choose Cash Over Points (and How to Change That)

Photo by Towfiqu barbhuiya on Unsplash

At checkout, millions of customers face the same choice daily: pay with cash or redeem loyalty points. Whether booking flights, reserving hotels, or shopping with retailers offering point redemption, this simple choice can drive significant business outcomes across industries.

Customers’ decision to pay with points touches upon a fundamental challenge that many reward programs struggle with: program members accumulate points but hesitate to use them.

According to our Global Loyalty Program Benchmarking Study early results, only 35% of program members on average have redeemed their program points. When customers consistently choose to pay with cash instead of using available points, programs miss opportunities for customer engagement and revenue growth.

Part of the solution lies in understanding how customers make the choice between points and money at checkout. This decision involves more than simple math. Customers treat points and money as fundamentally different currencies, leading to predictable but non-obvious behavioral patterns.

The Business Stakes Are Higher Than You Think

Revenue Impact

When customers choose to pay with points instead of cash, it creates a dual…