Why the Offers Economy Is Broken

Picture a woman standing in the checkout line at her local grocery store, frantically thumbing through her phone looking for a promo code she was sure she had saved somewhere. Maybe it was one of the times you were standing behind her.  The cashier waited. The line waited, though not very patiently. She eventually gave up, paid full price and walked away annoyed. But not at herself. At the store.

That scene plays out millions of times a day across grocery stores, retail shops, restaurant apps and eCommerce checkout flows. A deal is out there. A consumer wants it. But the engine to connect them sputters and fails. The store collects the data point on an unredeemed offer and moves on. The brand absorbs the wasted promotional spend and chalks it up to the cost of doing business. The consumer, tired by all the jitter-jive associated with the three or four steps required to find and then redeem a promo code or an offer, eventually stops trying.

“So what,” some merchants and brands might say. The customer still shopped at the store, still bought the product and, bonus, paid full price. What’s so wrong with that picture?

Here’s what’s wrong.  Every one of those unredeemed offers isn’t just a missed connection. It’s a missed connection with a customer who may shop somewhere else next time.

The consumer who never saw the offer and paid full price probably wondered whether they missed out on a deal somewhere else for the same thing. The brand spent the promotional dollar and got nothing back. The merchant lost the chance to win a basket that might have looked different, even bigger, with a customer who might be more loyal had the right incentive arrived at the right moment.

New data from PYMNTS Intelligence finds that 50% of restaurant diners and nearly half of retail shoppers noticed no offer during their most recent visit. The offer was there but they couldn’t find it, didn’t see it. That’s not a rounding error in the redemption data. These are the customers brands most want to reach and are most consistently failing to convert.

A new PYMNTS Intelligence report produced in collaboration with FIS surveyed 2,754 consumers across grocery, restaurant and retail, putting hard numbers to a problem the industry has been tolerating for years. The findings aren’t a gentle critique. They describe an offers economy that’s out of step with the consumers it was built to serve, extracting data and attention at the top of the funnel while failing to deliver value where it matters most. At the bottom of the funnel, when it’s time to close the deal.

What the data reveals is that the breakdown in the offers economy isn’t about coupon mechanics or loyalty app design. It’s about whether the promotional dollars that brands, merchants and issuers collectively spend are achieving the one thing offers are meant to do. Change behavior.

PYMNTS Intelligence data shows they can, and sometimes they do. But the $42 billion gap in the offers economy points to a structural deficiency that has grown too large to ignore.

The right framework for understanding this structural breakdown is FIT: Friction, Inertia and Time. I’ve been writing about these forces for years, drawing on data from dozens of platform inefficiencies to develop it. What I’ve found is that each force operates independently. Together, they’ve created an offers economy that consumes enormous promotional investment while delivering outcomes that fall far short of what new technology, new models and new ways of thinking about offers now make possible.

Read More: Using the FIT Framework in a Digital 3.0 World

The Wanamaker Problem, Still Unsolved

The early department store pioneer John Wanamaker famously said that half of his advertising money was wasted, but he didn’t know which half. That was in the early part of the 1900s, when paper and pen were the most innovative tools available to track those outcomes.

One hundred and twenty-six years later, that dilemma defines the failure of the 2026 offers economy, even as offers have gotten richer and more plentiful and the technology available to serve them is now extraordinarily sophisticated.

Among the consumers who did find an offer, only 13% online and 10% in-store experienced the automatic application of the discount at checkout. The other 87% to 90% had to put a lot of elbow grease into redeeming them, clearing an average of more than two active hurdles just to use a deal they were already aware of, the PYMNTS Intelligence data found.

And when consumers who saw an offer but said “no thanks” were asked why, 40% said the offer wasn’t relevant. Not the obstacle course between discovery and checkout. Irrelevance. The offer had already captured their attention and in many cases their personal data. But returned a deal they didn’t want.

Read More: Personalized Offers Are Powerful — But Too Often Off-Base

This disconnect is commercially more serious than a leaky funnel.

The $42 billion sitting uncaptured in the gap between promotional dollars spent and consumer value delivered is the economic impact of a system that isn’t living up to its potential.

Seven in ten consumers who noticed an offer changed what they bought or how much they bought when the offer actually reached them.

So, every dollar disappearing into the gap between an offer that existed and a consumer who never found it is more than wasted spend. It’s a lost opportunity to change behavior, win a brand switch, build a basket or earn a payment method preference.

The outcomes the offers economy is supposed to produce.

Making the Offers Economy More FIT

My two cents is that the friction in the current offers system isn’t accidental. It’s a deliberate design choice.

Think about your own experience in finding and redeeming offers. The offers ecosystem was built to use the lure of a discount as a mechanism for data capture at the top of the funnel. Sign up for the email. Create the account. Opt into the text notifications. The consumer is asked to “pay” in personal information and future attention before they have any basis for trusting that what comes back will be relevant or worth the exchange.

When 40% of non-redemptions happen because consumers find them irrelevant, it means the data capture is often happening without the personalization payoff that was supposed to justify it. The brand got the email address. The consumer got nothing they wanted.

The “I love it/I hate it” ubiquitous promo code is the most visible symptom of this dysfunction.

A brand distributes codes across email campaigns, coupon aggregator sites and promotional partnerships, loses control of who redeems them and under what conditions, captures no meaningful attribution data from the transaction and builds no relationship with the consumer who found the deal on a third-party site and who will return to that site next time rather than to the brand or merchant. The code is not a marketing tool. It is a markdown without meaningful attribution.

That dysfunction persists not because merchants and brands can’t see it, but because inertia has made it too comfortable to ignore. And, ironically, so durable.

Consumers have adapted to the broken system rather than rejecting it. They use secondary email addresses for promotional signups. They abandon carts and wait for the recovery email that almost always arrives with a better offer. They have learned the game and play it, which creates a false signal for merchants and brands who look at redemption rates and email list growth and conclude that the system is working.

What the metrics don’t capture is the 27% of shoppers who pay no attention to offers at all because the current offers ecosystem hasn’t given them a reason to engage. Those consumers aren’t lost. They’re waiting for an offers experience worth their attention and their loyalty. The longer inertia holds the current system in place, the more the third force, time, works against everyone.

Read More: Embedded Offers: The Billion-Dollar Opportunity Inside Recent Consumer Spending

The dominant offer discovery channels — the merchant apps, checkout screens and in-store signage — all require the consumer to already be inside the purchase flow. The offer arrives after they’ve already finished their shopping. It creates no opportunity to influence what goes in the basket, consider an alternative product or increase spend.

The generational data makes the time pressure across merchants and brands more real. Gen Z is the most likely to shut the door entirely on offers, and therefore brands and stores, when presented with manual steps and promo code hunts.

Read More: The Five Rules of Engagement for Gen Z Spending and Payments

Nearly one in five Gen Z (19%) shoppers who saw an offer and didn’t use it cited too many steps as the reason, compared to one percent of boomers. For this generation, friction is not an inconvenience. It’s a reason to shop with another merchant or stick with the brand they already know rather than try something new.

What a Different System Changes

The  case for a better offers architecture starts with understanding, and then embedding offers, into the customer journey at the start, and not at the end.

Nearly nine in ten consumers say they want to see every relevant discount before they decide what goes in their cart. Before they decide they’re finished shopping and want to call it a day.

An embedded smart offer delivers it at the moment of intent. That shift does more than improve the user experience. It changes the purchase decision itself.

An offer that finds the consumer rather than waiting to be found doesn’t require effort, trust in a coupon aggregator or memory of a promo code under pressure at checkout. It arrives attached to the product in their consideration set, delivered through the card they already use, built on their actual purchase history rather than a demographic bucket.

The data finds that when offers do reach consumers, seven in ten change what they buy. Seven in ten change how much they buy. The goal is to make finding offers the default rather than the exception.

Read More: The $42 Billion Checkout Opportunity Hiding in Plain Sight

One-to-one personalization is what separates this model from every prior iteration of card-linked offers. The card credential carries transaction history across merchants and categories at a level of granularity that no email list or loyalty program can approach.

It knows not just that a consumer shops at a particular grocery chain but which brands they buy consistently, which they have tried once and abandoned, which categories they trade up in and which they treat as commodities.

A dynamic offer built on that data is much more than a discount. It is a precisely timed intervention in a known purchase pattern, served to defend a brand relationship showing signs of fatigue, to introduce a product at the moment the consumer is most likely to try something new, or to reward the specific behavior the brand wants to reinforce.

Read More: AI Pushes Personalization From Guesswork to Growth

According to PYMNTS Intelligence data, four in ten consumers say a form of smart, embedded real-time savings would be highly influential in making a payment method that supports it their default. Seventy-seven percent say it would be at least somewhat influential. The card that delivers embedded smart offers seems influential in winning in the wallet.

New Economics for Merchants and Brands

The attribution crisis at the center of the offers economy is as consequential as the consumer experience problem but gets far less attention.

Brands spread promotional budgets across email, coupons and loyalty programs and get back data that is too weak and too delayed to guide the next decision. Money goes out and redemption rates come back, but whether an offer drove new behavior or simply discounted a purchase that would have happened anyway is largely unknowable.

It is the Wanamaker problem, 126 years later, still unsolved.

Using the card credential as the delivery layer could address this at its root. The card is present at every transaction, which means a brand funding an offer at this layer knows exactly what was purchased, where, by whom and whether the behavior was incremental, such as a trial, a basket expansion or a brand switch.

The promotional dollar no longer buys impressions. It buys outcomes. Return on investment is not inferred. It is measured, attributed and immediately actionable.

For merchants, this changes the economics in a meaningful way.

Brand-funded offers become a source of incremental revenue rather than a cost center. For merchants, this reframes offers from an expense to manage into an asset that drives acquisition and retention.

The result is a reallocation of promotional spend away from impression-based marketing with uncertain outcomes and toward incentives tied to specific products, merchants and behaviors. A fundamental shift in how the offers economy works.

The Card’s Untapped Commercial Position

For issuers, this creates something new. It is a commercially meaningful position at the center of the offers economy that no ad network, email platform or coupon aggregator can replicate.

It is grounded in trust, verified transaction data and full visibility across the purchase journey. The question is whether issuers recognize the opportunity and move with the urgency it demands.

PYMNTS Intelligence data suggests the consumer is already there. Among those most willing to engage with embedded and personalized offers, 75% are willing to share data with banks and 78% with retailers.

These consumers are high frequency and high value. They skew toward millennials and bridge millennials and have established financial relationships.

This is the audience brands want to reach, and they’re ready to let the card be the platform that connects them.

Why Agentic Commerce Shortens the Window

The case for a better offers economy stands on its own in the current environment. But agentic commerce makes the window for building it shorter than most issuers and merchants currently appreciate.

AI-powered agents already assist consumers with purchase decisions. The next generation won’t assist. They’ll execute. A consumer sets preferences and constraints and the agent handles the research, the selection and the transaction. In that environment, the offers ecosystem as currently constructed isn’t just inefficient. It’s irrelevant.

Read More: What Happens to Stores When AI Agents Do the Shopping?

An AI agent doesn’t hunt for promo codes. It doesn’t sign up for email lists. It doesn’t activate loyalty IDs. If an offer can’t be accessed programmatically through a credentialed interface the agent can query and apply without intervention, the offer doesn’t exist for that transaction. The promotional dollars behind it simply don’t connect.

A tokenized smart credential is best positioned to survive this transition. An offer embedded at the card credential layer doesn’t need the consumer or the agent to do anything. It’s queried, surfaced, applied and attributed automatically. The agent selects the payment credential that delivers the most value at the point of purchase. The card with the richest offer layer wins the transaction by default, without ever competing for attention at a checkout screen.

Read More: Demystifying AI’s Capabilities for Use in Payments

The card that hasn’t built this capability will not lose that competition gradually. It will lose it at scale, as agent-mediated commerce moves from a niche behavior to a default one over time.

The Offers Economy Bet Worth Making

The argument for a better offers economy ultimately rests on a behavioral claim the PYMNTS Intelligence report makes with data-driven clarity.

Offers change what people buy, how much they buy and which payment method they use to buy it.

According to the data, these aren’t incremental improvements. They’re substantial shifts in commercial outcomes driven entirely by the presence of a relevant, timely, frictionless offer.

The current offers economy captures only a fraction of this behavioral potential because it was designed around data extraction rather than value delivery, and because the friction it introduces at every stage causes the majority of consumers to never encounter the offer at all or to abandon it before redemption.

An embedded smart offers model inverts this logic entirely. The offer finds the consumer. It’s relevant because it’s built on verified transaction data rather than demographic stereotypes.

It’s applied automatically, so the behavioral effect does not depend on the consumer remembering to act at the right moment or clearing two, three or more hurdles to redeem it, if they see it in the first place.

And it creates a data loop that allows brands to observe outcomes directly and improve targeting with each iteration.

The consumers most ready to engage with this model represent more than half the U.S. adult population.

The brands most likely to fund it are the ones watching their promotional budgets produce diminishing returns in channels that can’t demonstrate attribution.

The merchants most likely to benefit are the ones that need new sources of promotional revenue that don’t require them to sacrifice already thinning margins.

The issuers most likely to build it are the ones that understand the card credential is no longer just a payment instrument. It’s foundational for building a relationship with their customer.

Until NEXT time.

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