Inflation has consumers increasingly interested in cash-back shopping rewards: survey
Credit card rewards programs face their biggest challenge yet, despite their popularity
Consumers want to earn on their purchases and increasingly value rewards programs – including cash-back and discounts – as a way to save money, a survey by Wildfire Systems said. (iStock)
Inflation and rising costs have made rewards programs – including cash-back and discounts– popular among consumers, who are drawn to them as a way to save money, a recent survey said.
The demand for shopping rewards has become a "vital ingredient in both consumer expectations and financial institution incentive programs," the survey, conducted by Wildfire Systems, a fintech platform for reward programs, said.
The vast majority of consumers surveyed (90%) said they are more interested in receiving discounts, using coupons, and earning cash-back rewards when they shop because of rising prices. Additionally, 63% of respondents expected to receive online shopping rewards from their credit card issuers.
"This new research reveals current consumer attitudes towards shopping in a fairly tough economy," Wildfire CEO Jordan Glazier said in a statement. "The findings highlight the fact that cash-back rewards, discounts, and other incentives have crossed the chasm into the mainstream."
Shopping rewards are not only popular, consumers now expect them from their favorite brands and financial institutions. Rewards programs have become critical to driving customer engagement and retention, as well as online retail revenues.
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Inflation has increased demand for cash-back rewards
More consumers want cash-back rewards amid high inflation and rising costs, the survey said.
Eighty percent of respondents ranked the ability to earn cash on purchases as their number one preferred method of receiving rewards, the survey said. And 85% said they want their banks to offer cash-back rewards programs for online shopping.
"Consumers not only want their financial institution to offer shopping rewards, they expect it," the survey said. "Of all of the services they use, consumers most expect their credit and debit cards to provide shopping rewards."
"In addition, consumers indicate that earning cash-back rewards for shopping online is among their top considerations when selecting a new financial institution," the survey continued.
If you are looking to reduce your expenses amid the current economy, you could consider using a personal loan to pay down debt at a lower interest rate, saving you money each month. You can visit Credible to find your personalized rate without affecting your credit score.
Legislation may threaten cash-back rewards and points programs
If passed, the Credit Card Competition Act of 2022 could harm credit card rewards.
The bill would require that two competing networks be enabled on a credit card. It would no longer just be Visa or Mastercard — there would have to be a smaller, competing network enabled on the card as well.
The bill aims to reduce the interchange fees for credit cards by increasing competition within the industry. Opponents of the act said it would essentially remove the key funding mechanism of rewards.
The American Free Enterprise Action recently launched an advertising campaign drawing attention to the possibility that this legislation could spell the end of credit card reward points.
"Millions of American families and businesses rely on their credit card benefits for travel, dining, shopping, and cash back," Gentry Collins, CEO of AmFree Chamber, said in a statement. "The Credit Card Competition Act would strip American consumers of billions of dollars a year in benefits – resulting in less travel and less spending."
"It will also hurt the millions of American small business owners and local towns that rely on these benefits the most," Collins continued.
If you are struggling amid rising inflation, you could consider taking out a personal loan to help pay down high-interest debt at a lower rate, saving you money each month. You can visit Credible to find your personalized interest rate without affecting your credit score.
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