Loyalty After Death: 76% Of Consumers Don’t Consider Benefit Transfers

By Pete Rizzo (@pete_rizzo_)  

Consumers love loyalty programs: September research from SAS reveals that 95 percent of U.K. shoppers have at least one loyalty card, and that 40 percent are less likely to do business with a company that doesn’t offer such a program.

However, a new report released by Colloquy on October 24 finds that despite so many incentives being accrued – the total value of which reached almost $50 billion in 2011 – many consumers aren’t aware of what would happen to these earnings if and when they should pass.

The study revealed that only 12 percent of consumers are aware of their loyalty program’s bequeathment policies. Further, 76 percent have never considered this aspect of their policy.

“To add to the confusion, not all companies’ policies are accessible online, which obliges consumers to call customer service centers,” Colloquy wrote in its report. “Regrettably, consumer service representatives were not always well-informed sources.”

Programs that allow the transfer of loyalty points to dependents do not make the process easy, requiring multiple legal documents, such as a death certificate or a letter from the executor. The findings gain more relevance in light of the firm’s past reports that suggest up to $16 billion in rewards points go unused annually.

For a closer look at how loyalty program providers in the airline, hospitality and credit card industries are structuring these policies, we break down Colloquy’s “Inherit the Windfall: Passing On Loyalty Points” to learn more.

Credit Card Loyalty Programs

Colloquy analyzed four popular loyalty card programs offered by American Express, Citi, BankAmericard and U.S. Bank. All allowed for the transfer of loyalty after the death of the account holder without fees. However, the terms differed.

For example, American Express’ Membership Rewards and U.S. Bank’s FlexPerks program require that loyalty points be distributed to the executor of the estate. BankAmericard Travel Rewards points can be given to any beneficiary.

Of the four companies, only one company, BankAmericard published its report online.

Airline And Hotel Loyalty Programs

Unlike credit card loyalty programs, those offered by airline and hotel services providers were less likely to transfer after death. Four of the nine programs studied did not allow for this type of benefit transfer.

Four of the five airlines and three of the four hotels, however, did publish their policies online. Only one program, United’s MileagePlus, charged a fee for the transfer.

Transparency Key To Increasing Loyalty Satisfaction

The most important takeaway for those looking to impact the loyalty space was that 48 percent of consumers indicated that they considered a transparent protocol for the transitioning of policy points important.

This finding suggests loyalty programs may be able to be proactive by offering education and advice in this sensitive subject area. For more insight on how loyalty programs can best be geared to account for this sensitive issue, read Colloquy’s full report here.


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