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No One Cares About Loyalty Programs Anymore?

No One Cares About Loyalty Programs Anymore?
Joe Cortez

A new study suggests millennials are not as loyal to loyalty programs as their parents and grandparents once were. Half of the current generation let hotel points and airlines miles expire, a percentage higher than the generation before. And 44% don’t use credit card points⁠—a stark difference from generations past.

Millennials have been accused of killing everything from homeownership to casual dining. And, according to a recent study, their next target may be airline, credit card, and hotel loyalty points. In the most recent Bankrate Credit Cards survey, half of adults polled admitted to leaving rewards to expire⁠—and the biggest group to leave fruit on the vine were millennials.

The young professionals⁠—aged between 23 and 38⁠—have left more hotel points, airline miles and credit card rewards linger than the generations behind them. The study results suggest 44% of millennials let credit card rewards expire, half allowed airline miles to expire and 57% let their hotel points disappear.

Stepping away from airline miles may be a bigger trend among all adults. In the survey, 46% of those in Generation X and Baby Boomers admitted to not using their airline miles, leaving them to be reclaimed by the airline. However, they are adamant about using their hotel points and credit card rewards: Among the two groups, between 40 and 42% let hotel points expire, and between 19 and 26 percent of Gen-X and Baby Boomers left credit card rewards behind.

According to Bankrate, part of the problem is in how points and miles are used. Among those polled, 53% said they did not know how much 10,000 points were worth. Bankrate estimated that the stated amount is worth between $100 and $200 in rewards, at an assumed value of up to two cents each.

Another concern is the move to dynamic award pricing, as opposed to fixed reward amounts for award flights. Starting November 15, 2019, United Airlines will move MileagePlus awards to a dynamic award chart – leaving all three legacy carriers and Southwest Airlines with a reward program where flight award prices in miles change based on the cash price of a flight and demand.

For those that don’t want to stay loyal to one program, there is still hope. Reward programs from American Express, Chase and Citi offer flexible points that can be applied to a number of travel rewards – but you still have to remember to use them.

View Comments (50)

50 Comments

  1. eajusa

    October 9, 2019 at 7:20 pm

    The reason people leave miles and points expire is because they are lazy.

  2. JackE

    October 9, 2019 at 9:37 pm

    The title says “people” don’t care, but this article is about Millennials.

  3. Nitehawk

    October 9, 2019 at 10:09 pm

    I let points expire, by accident. And I’m angry at the program that expired them everytime. IHG let’s my points expire (enough for at least 5 nights) after 12 months of inactivity with no warning? Great I will avoid IHG. Hhonors? Same thing. Flying Blue, Alaska… Boycott! I know it’s mostly my millennial selfs fault, but it still isn’t a nice feeling.

  4. drvannostren

    October 10, 2019 at 12:02 am

    The fact is, the miles are harder and harder to use and becoming more and more devalued. HOWEVER, those of us who are willing to do the work, still extract great value from many of these programs. When my friends ask how I travel so much, I tell them I’m flexible, I keep an eye on cheap airfares regardless of destination, and I pay attention to my miles. I’ve flown around the world in business 3 times and once in economy on miles. If all the other millenials wanna throw away their miles, I’d be happy to take them 🙂

  5. strickerj

    October 10, 2019 at 4:43 am

    I’m not sure it’s so much a generational difference as the loyalty programs have just been gutted lately and don’t do as much to actually encourage loyalty as they used to. The older generations may stick to their programs because they already have a lot invested in them, but to travelers just starting out, it doesn’t really make as much sense.

  6. amt

    October 10, 2019 at 5:21 am

    I don’t interpret it that way.

    Rather the proliferation of loyalty programs across every service, app, product and aggressive marketing of them has lead to people signing up for a dozen or more new programs a year but only really maintaining and redeeming balances in a few core programs that they use regularly and that matter to them.

  7. AJNEDC

    October 10, 2019 at 5:29 am

    I have never understood this loyalty craze/addiction that some people developed. I find it hilarious when some people boast they are platinum this and senator that as if it is some badge of honour.

  8. TonyBurr

    October 10, 2019 at 5:43 am

    Maybe the title should be “Loyalty Programs don’t care about people anymore”. All of them have so downgraded the benefits and devalued the programs. Really, who has abandoned who here?

  9. texmanufan

    October 10, 2019 at 6:30 am

    This is mostly the result of older folks clinging to habits from the glory days of the points and miles game. Probably just not worth the time for millennials to learn the ropes for programs that are constantly devaluating.

  10. musicman27pa

    October 10, 2019 at 6:54 am

    The other issue is hold difficult they are to use — AA being the worst of the airlines to redeem.
    Also that value of .01-.02 per mile is a bit high with black out dates of restrictions on desireable flights.

    Nobody wants to take a 8-10 hour lay over to use points when there is a direct flight for a reasonable price considering most people are redeeming to go on vacation and time is money.

  11. Counsellor

    October 10, 2019 at 8:54 am

    Especially with them going to “dynamic” award pricing, the airlines have so devalued their “miles” that it’s hardly worth it to remain loyal to one carrier; it makes much more economic sense to buy based on price or schedule, and once you do that it’s harder to accumulate enough miles on any single carrier to earn award flights so the miles tend to expire or not be collected at all.

    If the airlines (and hotel chains) expect their loyalty programs to bring in more business, they’re going to have to make them more rewarding.

  12. sdsearch

    October 10, 2019 at 4:02 pm

    Did the majority of Americans EVER care much about loyalty programs? I’m confused by these statistics, I wouldn’t think even anywhere near half of Americans are SIGNED UP FOR loyalty programs (especially if you don’t count cashback-only cards as loyalty programs).

  13. am1108

    October 10, 2019 at 7:51 pm

    The issue is the constant devaluation of the company and the programs. They don’t offer as much value as they used to especially when you look back 10 years ago. As a Premier before the United/Continental merger I remember being able to check in two bags, get economy plus seating at booking, getting upgrades and having an empty seat next to me, etc. vs. the current environment where even 1Ks are not getting upgrades.

  14. Whodunit68

    Whodunit68

    October 11, 2019 at 4:14 am

    homeownership isn’t a word.

  15. crwander

    October 11, 2019 at 4:17 am

    I see the issue as everybody has a loyalty program and they’re all free to join. I join every loyalty program I have the opportunity to join, for the initial perks, but I often leave miles/points on the table when I don’t accumulate enough to use. I do use the 3 or 4 programs that I get the most benefit from.

  16. Marathon Man

    October 11, 2019 at 4:17 am

    drvannostren Nailed jt. Exactly my thinking.

    Problem is, companies are responding to and marketing to these young folks and saying things like “this is what our customers want” and I dont want to lose my miles and have award redemptions to go up and have it harder to redeem

  17. PapaJack

    October 11, 2019 at 4:29 am

    I get plenty notices from various programs when my points for that program may be expiring, and then I make the call. For example I lost my gold status on Starbucks because I didn’t purchase enough coffee in one year….guess what, I am not a fan of their coffee and drink it once a week with my coworkers when we all go to Starbucks after lunch. However, for my active points, like my Delta FF, I use those as I accumulate them and have rarely dropped more than $150 (taxes) in family trips into Europe, Caribbean etc. Call me lazy, but I prefer to enroll in the programs and if there’s a benefit down the road, that I am eligible for AND that I want, I go in the direction.

  18. John Aldeborgh

    October 11, 2019 at 4:30 am

    Two key points. First, loyalty programs have eroded materially over the past decade, so the air has been let out of the balloon. Second, if you aren’t a true frequent traveler the loyalty programs are somewhat invisible.

    I have traveled, by most measures, frequently over the past 30 years. It wasn’t until I had somewhat unconsciously accumulated my first million miles on United that it dawned on me that loyalty was valuable. I used to try and split my spend on multiple carriers, big mistake. Now as I approach 5 million miles on United I enjoy lifetime perks of both United Club and Global Services. I like to say I’m almost treated like a customer. This is a direct result of loyalty over 40+ years. It’s basically just paying your dues, like anything in life. Young people think they know everything, they don’t, persistence pays dividends where loyalty programs are concerned.

  19. manarak

    October 11, 2019 at 4:42 am

    I was using the frequent flyer program of Oman Air when they were consistently pricing their flights competitively and for the enjoyment of their lounges, I was sometimes ready to pay a little more (up to 50 USD) to get a flight with them. But since they stopped competitive pricing, I now fly with the cheapest carrier.
    Overall, frequent flyer programs are just not worth it, requirements are high, rewards are stingy and I guess the only people using them are forced to fly for that cost anyway.

  20. 50ae

    October 11, 2019 at 4:54 am

    I think Musicman above said it best. Why am I going to layover when the direct is empty and reasonable. You also can’t get an award ticket and a purchased ticket bought on the same flights which screws up family travel un less you have saved up enough for 4-5 award tickets. Then you add in AA’s complete inability to have the planes arrive on time so that you make your connection and well, screw it, I’m buying direct tickets instead.

  21. flyboy_88

    October 11, 2019 at 4:59 am

    It is hard to remain loyal to a program when programs devalue their points so much and make it difficult to obtain. Their stupid dynamic points idea based on pricing makes people LESS loyal. People tend to be more loyal if they have an incentive to do so! A majority of people still buy based on price and if your prices are not going to be competitive NOR incentivizing us with points, why should we stay loyal to you??

    I don’t know how much points expiring is by choice. There is a dizzying amount of programs with a dizzying amount of rules to go with it. It is hard to keep track of when points expire when they are all different. IMO, if you earned it, it should be yours to keep for life! Also, with the devaluation of points, it becomes even more difficult to get enough points to redeem. If anyone is killing the loyalty programs, it is the program’s themselves.

  22. kingbee

    October 11, 2019 at 5:12 am

    My Schwab platinum card with .0125 cash redemption per point, 5% points per airline purchase and discount pricing on premium seats has made the airline miles game not worth playing any more.

  23. firstlight

    October 11, 2019 at 5:13 am

    One exception is the BA Executive club, described as the ‘crack cocaine’ of airline programs. There are people (not me) who will fly transcontinental for 3 days just to maintain their elite status.

    Personally I’ve had 3 intercontinental first flights for 2, 3 intercontinental business flights for 2 and 6 intraeurope flights this year alone from the program.

  24. Fabo.sk

    October 11, 2019 at 5:43 am

    I think this is down to two things.

    1. It’s easier than ever to enroll to a program. In the decades past, you had to write a form and mail it in, or hand it in in person at a location. You only took that effort if you wanted to use the program.
    Today, you go on a hotel chain website, register yourself, or even just click on “Sign in via FB/Google/…” button, so that you can pull up your booking without looking for the confirmation… and you’re now a member without even knowing, much less caring.
    End result is, people who went to maybe two trips a year did not enroll, now they do. But how are they supposed to use the 432 points they got for a night in Holiday Inn Express before their flight to visit family for Thanksgiving?

    1a. Corollary to this, it’s much easier to shop around today, especially for hotels. While earlier, you might phone the Hilton line to ask what hotels they have available in Austin, if you had a Hilton card, today, you put “Hotel in Austin” to Google and you can shop around very easily. Which leads to both less points from Hilton and potentially more accounts created as per point 1.

    2. It’s getting harder and harder to gather any useful number of points. Base earning is getting lower, being converted to spend-based (and getting much lower in the process), special offers are getting worse and worse. Where you used to need to get 5 nights to get a free night, or 2 nights if you played your special offer cards well, now you might need 15 nights, 10 if you play your cards well. Same with airlines. For credit cards it’s maybe a bit different, but then you have so much more cheaper options to pay nowadays than a credit card.
    End result is, not enough people get enough points to actually use.

  25. truclarson

    October 11, 2019 at 5:45 am

    A cashback credit card now generates ALL of my points. I can use the $$ more effectively and efficiently by using the cash to buy a ticket outright.. And Southwest allows me 2 bags and no penalty change of ticket. WOW, thanks to those who know what is important to me.

  26. avw

    October 11, 2019 at 5:54 am

    Some loyalty programs are impossible to use. I always look for an opportunity to use my Delta miles for a business class ticket. The price keeps going up. I have almost 500,000 miles to spend, but it never works out when I try to use them, even booking many months in advance. I am wondering why I bother. AA is great. I use their points regularly and work to build them up again because I know that I can use them again..

  27. Athena53

    October 11, 2019 at 5:58 am

    I was more diligent about taking advantage of bonus offers, etc, when I was traveling on business (to the extent that they didn’t cost my employer any additional $$) but as a retiree, I fly Business Class on long hauls and have found that the airlines’ love can be bought. I’m hoping to fly international Business Class on UA/CO just so I can use the Polaris Lounge in ORD again- AA’s Admiral’s Club is a joke by comparison. So, I choose the airline with the best overall experience, not based on any loyalty.

    Hotels: they’ve gotten crazy and Airbnb is a nice alternative. Hilton gutted their program by allowing hotels to offer only “premium rooms” (which are perfectly ordinary rooms) for reward redemption, at crazy multiples of stated award points.

    I do track miles and points, make sure they don’t expire and use them when they make sense, but they have less and less value to me.

  28. Tharos

    October 11, 2019 at 6:05 am

    Seems like we are missing the rest of the story in this Sophomoric piece. How often do these people fly? How often do they fly that airline? How many points are being lost per person? Let’s face it, flying is a hassle. If I can drive to my destination in 8-10 hours or less, I will. I once let 2,000ish AA points expire because I wasn’t flying as much, moved to a city serviced by UA and Delta, and 2,000 points aren’t worth the trouble to keep. Sans details on the analysis, this is gibberish, not news.

  29. drussum

    October 11, 2019 at 6:12 am

    Some people care, others do not. It depends on the individual and what the product/value is to that specific person.

  30. Grog

    October 11, 2019 at 6:20 am

    Delta promised me years ago “miles that NEVER expire”. Then they reneged on it. Companies continue to rob their own employees of their retirement programs.

    Loyalty is dead because corporations feel no obligation to uphold their own promises. If they don’t, why should we?

    We need governments to start holding CORPORATE EXECUTIVES personally responsible for their decisions at work. Then maybe we can trust them a bit more when they open their mouths.

  31. alexmyboy

    October 11, 2019 at 6:25 am

    letting points expire is a crime.

  32. respawn

    October 11, 2019 at 6:35 am

    Two problems here:
    1. Due to airline consolidation and market stratification, it’s difficult for all but the most hardened business travelers to pick one airline and stick with it. I have two routes that I frequent. On one of them AA offers a direct flight, WN offers a reasonable connection, United just discontinued the only reasonable connection route, and DL won’t even offer a route. For the other route, it’s a similar story where WN doesn’t offer the route, United and AA both offer very unfavorable routing, and DL is both the most cost effective and the shortest overall time. This makes it hard for the non-frequent traveler (which is me – about 20 trips per year) to stay loyal to anybody because…
    2. Loyalty programs aren’t worth anything anymore. Sure, in my example above I could take AA for the second route and might achieve gold with them, but realistically what does that get me other than a pat on the back and a promise that I might just get lucky one day and get a free seat upgrade 24h in advance. Which, by the way, I’m not going to count on and will have already bought the seat upgrade, and which AA will not reimburse me for if I were to be granted a free upgrade.

    So, yeah. It’s not that people are abandoning them specifically, it’s that they just aren’t worth the hassle for most travelers who aren’t on a flight every week. (When I flew every week, loyalty absolutely was worth the hassle, but not these days.)

  33. RandyN

    October 11, 2019 at 6:43 am

    Letting points and miles expire is lazy and financially irresponsible. It isn’t that hard to burn your points off, folks.

    I’ll bet a lot of these people also have recurring charges on their credit cards every month for services they no longer use.

  34. pmiranda

    October 11, 2019 at 7:25 am

    Schedule is still king for me. My loyalty to any given airline is limited to their ability to give me useful flights. Still, through business and personal travel I manage to accumulate enough miles on two airlines to get at least one free trip every year. The first “elite” level on most airlines doesn’t get you anything more than holding their credit card, so that’s a pretty big reason not to bother trying to accumulate many miles.

  35. canyonleo

    canyonleo

    October 11, 2019 at 7:26 am

    Stupid article. Loyalty programs have been gutted (devaluations, difficulty to redeem, no more great bonus programs – for reasons like economies booming, and no more perks like int’l upgrades and such). If (when again) these programs had high worth, they’d be very popular – who isn’t interested in free trips and perks? Even milenials will come flocking once/when there’s value here.

  36. SerialGriller

    October 11, 2019 at 8:01 am

    I certainly care. The considerably higher level of service and the perks are worth it. The younger travelers will grow older and wise with experience and learn to value these things. I certainly did. It takes to time to learn the value of things instead of just the price of things, and it takes experience to learn that convenience isn’t the highest consideration in enjoying life.

  37. DeltaFlyer123

    October 11, 2019 at 8:14 am

    The airline points started as airline deregulation was taking effect, whereby airlines had to fight for their customers as opposed to earlier where tickets were a transferable commodity. But after deregulation, consolidation began, and as airlines gained increasing greater market share, the points began to lose their value.
    I’m a baby boomer with tons of points, and ironically, I spend them mostly on flying my sons and their wives home for Christmas and Thanksgiving.
    As for the other aspects of the loyalty programs, I enjoy my free upgrades to Comfort+ and occasionally first class, and the use of the SkyTeam lounges on international travel, which also applies to North America outside the USA.
    But I see the writing on the wall, so will surely start spending my points. Until now, I needed them to reach 2-million miler status, and lifetime gold status, so now is a good time to spend them on a nice big vacation!

  38. Loren Pechtel

    October 11, 2019 at 8:20 am

    The systems are increasingly engineered to make you waste them. Is it any surprise that people are?

  39. andrewk829

    October 11, 2019 at 8:50 am

    If the younger generation is less concerned about loyalty programs, that probably means they worry less about achieving and maintaining airline status. And to that I’d probably say (1) good for them and (2) good for those of us who now have less competition for upgrades.

  40. CEB

    October 11, 2019 at 9:23 am

    Agree with amt, however I would also add that the analysis does not take much into account. For example, millennials are substantially younger than their predecessors, so when did the previous generation start collecting points & miles. So much is missing from this ‘analysis’ that it is essentially useless.

  41. Nevsky

    October 11, 2019 at 9:27 am

    For most people today a Cash Back card would make much more sense. With 2% cash back, most people would be much better off. It is only some people on sites like this that can extract more value than that.

  42. c1ue

    October 11, 2019 at 10:00 am

    I would suggest that the reason millenials allows points to expire is because of their economic circumstance.
    What good does frequent flier miles do, if you can’t afford the hotel/car/food wherever you go?

  43. BC Shelby

    October 11, 2019 at 1:37 pm

    @ canyonleo [“Loyalty programs have been gutted (devaluations, difficulty to redeem, no more great bonus programs “]

    …exactly. Back before Delta acquired Northwest, I was a Worldperks member. That plan had some of the best awards and rewards (and likely became part of their financial woes). For 10,000 miles I could upgrade to First. for 20,000 I could get a free domestic RT coach ticket or upgrade on Hawai’i and Alaska flights. for 30,000 I could get a free RT coach ticket to Alaska or Hawai’i and for 40,000 RT coach internationally. They frequently offered double miles for special promotions and minimum mileage for any fight was 750 (and mileage was awarded for each segment when connecting, not just origin to final destination so if you had to fly out of the way you got a little back for your troubles). I also had access to their World Clubs. Considering most of the places I lived (save for New Orleans back in the 70s) and/or flew fro/ to were on Northwest wo yeah I did build up a fair amount loyalty with them (flew them regularly ever since the 1960s) which at times paid off in more than just mileage awards..

    People have knocked them over the years but I never had a bad experience on NW. For example on one flight from MKE to PDX (via MSP) the plane I was supposed to be on to the Twin Cities was grounded at another airport by weather, so they rerouted me from on a later departure from MKE to DTW to PDX. and awarded me the mileage for that routing instead of MKE – MSP – PDX. I also received a 150$ bonus voucher for my next trip and they even paid for my lunch at any of the restaurants in the terminal as the delay was something like 4 hours. On another trip back from Cape May NJ I was caught in a terrible traffic jam because of pileup on the Jersey Turnpike. I called the airline periodically to update them on where I was and when I finally made it to PHL I was told they held the plane for me as long as they could but had to let it depart. They then rebooked me on the first available flight the next morning, (in First) and the put me up at the airport hotel (in a suite no less). I also found out when I checked my mileage account a week or so later, they awarded me first class (double) miles for the return trip.

    Not many airlines will do that today.

  44. kkua

    October 11, 2019 at 2:49 pm

    It’s just another way to cull the herd of frequent fliers and a way to reduce liability on their accounting past 1 or 2 years.

  45. picturegal

    October 11, 2019 at 4:13 pm

    I’ve used BA Avios and yearly companion ticket for many years to fly business class to Europe and Asia, but no more. I just went to book 2 supposedly award tickets from the US to London, and the “taxes and fees” charge was $3071. That was more than the cost of one business class flight, paid with cash.

  46. northernlights1

    October 12, 2019 at 7:30 am

    The main reason I value loyalty programs is not to redeem airline tickets. It’s to avoid being bumped from a flight or being reaccomodated much easier than the general public. With load factors being so high, cancellations and rebooking are almost guaranteed when weather turns bad. Its far more important to me to get to my destination on time than where I can travel on vacation.

  47. chrystinp

    October 12, 2019 at 10:37 pm

    I’ve accumulated 3.5 million AA miles and have used all but about 170K at this time. About 2 millon with Marriott and about 1 million with IHG and have about 200K and 100K available, respectively. I have enjoyed using my miles for all kinds of trips. The rewards for AA used to be great, now they’re so difficult, hardly anyone qualifies. I’m glad I earned all those points AND spent them. I know so many people just sitting on miles.

    Once I was in an exit row with two other business travelers. They both had an amazing amount of system-wide upgrade awards available and neither of them had a clue what they were OR had used them. They only learned about it because we were having a conversation on accumulation/using points and I clued them in. They checked their accounts while we were en route and were mightily surprised at what they were sitting on.

  48. MHG

    October 13, 2019 at 12:39 am

    Well, being on the (continental) European side of the pond probably makes me look a bit different on things …
    First of all I´m not such a frequent flyer that I´d generate enough miles / loyalty to make it to a “useful” level simply because I prioritize schedule / pricing / and a few other criteria over loyalty.
    Mostly because over the years I have come to the conclusion that these loyalty programs have shifted their main target from simply making / keeping people loyal to become sort of ancilliary revenue.
    This development has accelerated strongly in the past +/- 10 years.
    “Unrestrained greedyness” is the most appropiate term I´d say.
    The service idea has been abandoned because of businesses shifting more and more towards short term revenue.

    I´ve had a few “free” flights and hotel stays but I look at it as a nice bonus (if I happen to be sufficiently loyal to some company / alliance) rather than a target that forces me to go out of my way.
    Couldn´t care less if miles / points expire despite I indirectly paid for them before since the price I paid is no different from with or without membership of the respective loyalty program.

    The only exception being my (2) preferred hotel programs that give me a 5-10% discount when I book on their resp. website compared to non-members and bookings through other booking sites.

  49. BMGRAHAM

    October 13, 2019 at 1:17 pm

    It’ just plain stupid and irresponsible to let them expire. Why would anyone not use free travel?

  50. TWAflyer

    TWAflyer

    October 13, 2019 at 1:45 pm

    Many of the comments here have precisely described the problem: the programs are continuously devalued, in terms of tickets, upgrades and simple loyalty recognition. In the glory days of FF programs, it was relatively easy to accumulate points if you you did your part and loyally flew the airline. Upgrades were generally available and the airline (booking, in-flight crew – even airline execs when I had an issue about service) recognized you as a program FF in all of your interactions with them.

    Today, passengers are looked at as a commodity. Airlines don’t care who is filling a seat nor whether you will fly them regularly or even again. There are fewer seats (airlines) so someone will buy their ticket.

    Loyalty used to be a two-way street but today it’s at best one-way – which makes it not worth the effort to bother. And therefore when I fly today I look at price and schedule (and safety). But if I can drive somewhere in seven hours I won’t bother with the airline’s nickel-and-dimeing torture class (nor the TSA harassment).

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