Reward redemption effects in a loyalty program when customers choose how much and when to redeem
Matilda Dorotic, Peter Verhoef, Dennis Fok and Tammo Bijmolt study members of a loyalty programme with no point expiry and no required redemption timing, where members choose how much to redeem and when. They find that the decision to redeem alone raises purchases both before and after redemption, even when only part of a balance is used, and call this redemption momentum. It offers an explanation for pre-reward purchasing that does not depend on pressure from expiring points. Past purchases also make redemption more likely, and length of membership, age, income and direct mail moderate the effects. The authors conclude that firms wanting to raise purchasing should avoid point expiry and binding redemption thresholds.
Matilda Dorotic, Peter Verhoef, Dennis Fok and Tammo Bijmolt study members of a loyalty programme with no point expiry and no required redemption timing, where members choose how much to redeem and when. They find that the decision to redeem alone raises purchases both before and after redemption, even when only part of a balance is used, and call this redemption momentum. It offers an explanation for pre-reward purchasing that does not depend on pressure from expiring points. Past purchases also make redemption more likely, and length of membership, age, income and direct mail moderate the effects. The authors conclude that firms wanting to raise purchasing should avoid point expiry and binding redemption thresholds.
Written from the abstract read 2026-10-21 via IDEAS (RePEc) and the Erasmus repository record.
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Dorotic, M., Verhoef, P. C., Fok, D., & Bijmolt, T. H. A. (2014). Reward redemption effects in a loyalty program when customers choose how much and when to redeem. International Journal of Research in Marketing, 31(4), 339-355. doi:10.1016/j.ijresmar.2014.06.001