"Good morning. Americans love their loyalty points. Almost three-quarters of them use a credit card that lets them earn rewards. And the income generated from issuing those points is critically important to many players in the Fortune 500, especially airlines, hotels, and merchants. Delta Air Lines alone reported a 6% increase in loyalty revenue last year, with co-brand income from Amex up 11% to $8.2 billion."
"U.S. companies are expected to issue or redeem about $26 billion in points for customers this year. That doesn't include the hundreds of billions of dollars in uncashed points that keep people tethered to their loyalty programs, despite devaluations, or perks that are hard to redeem. Along with generating revenue, those programs generate data that lets companies recognize and engage their most valuable customers. That might soon change."
Americans widely use credit cards that earn rewards, with almost three-quarters holding such cards. Issuing points generates significant income for major corporations, notably airlines, hotels, and merchants; Delta reported a 6% increase in loyalty revenue and $8.2 billion in Amex co-brand income. U.S. companies expect to issue or redeem about $26 billion in points this year, excluding hundreds of billions in uncashed points that bind customers despite devaluations and hard-to-redeem perks. Loyalty programs produce revenue and customer data that identify high-value customers. Proposed and upheld laws, including the Credit Card Competition Act and Illinois’s Interchange Fee Prohibition Act, could cut rewards, raise card fees, and disrupt business models.
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