Too many loyalty programs to keep track of today : every store and brand has a loyalty program today and wants to target you. Just imagine – in Dubai, every airline has it’s frequent flier program, every hotel has it’s own loyalty program, every grocery store has its own loyalty program, every major retail brand has it own loyalty program? Now, there is a loyalty program for even real estate providers? How may loyalty programs are you a member of?....It becomes difficult for you to keep track of loyalty programs, leave alone how many loyalty cards, wallets or numbers you need to remember? You cannot carry too many cards or wallets? And keep accounting for these different loyalty programs?
Each program offers it’s own loyalty miles, points etc. with a view to promote their own products or services. To make it more complex, each brand has it’s own conversion matrix to convert loyalty points to fiat currency. Different conversion rates used in each loyalty programs means that you cannot decipher how much do you get by spending what on a particular product or services? As a matter of fact, brands and loyalty program owners do this on design as they do not want you to know how much you are getting back as rewards because most often is a very little amount, sometime as less as 0.2 to 0.3 percent of your spend which you get back as rewards or points.
There is no inter operability offered on loyalty programs in the market. Loyalty points or rewards earned cannot be combined, amalgamated or used together in a singular format to make redemptions. If you earn loyalty points on say a Brand X hotel for staying for 4 nights, which can get you say 1 night free, this can only be redeemed at that brand X hotel. Now, you might not stay at that brand X hotel for the next visit, so what happens to the loyalty points you have earned? They cannot be used.
There is a massive amount of wastage of loyalty points, which means that if not redeemed within a specific time period say within a year or two, these accumulated loyalty points go wasted. This is really bad for you as customers because you could not either accumulate enough so as to use theses for anything of value or you may have juts forgotten about these and they have now expired? On the other hand, these unused loyalty points are really good for the brands or companies providing you these loyalty points because they save costs and write these back if expired rounding off their liabilities. The majority of ancillary revenue for US major airlines is generated by the sale of frequent flyer miles, mostly those linked to co-branded credit cards. This is a trend which is fast catching up in Dubai, UAE and the region as well. Most major airlines have partnered with leading Banks to offer co branded airline and bank credit cards which offer free tickets through earning loyalty points by spending on the credit card.