Some companies still choose to set a validity period for the points or cashback they offer to their customers. However, the public has shown strong rejection towards companies that operate this way.
When a validity period is set, the public may quickly understand that the points will expire before they use them. Thus, they perceive them as irrelevant and choose not to shop through that loyalty program.
It is a major inconvenience for the customer to open their App or loyalty program page and see their points or cashback decrease, as they might feel as if they are being robbed, even if they are not. This greatly increases rejection.
Think about how it would feel if you received a gift and after some time, the person who gave it to you says that, due to the time that has passed without use, they want the gift back.
Why do companies set an expiration?
Many companies behave this way out of fear of harming their profit margins. Their leaders might believe that by offering many benefits, the public will redeem them massively, harming the company's accounting.
It is important to understand that the company should have a well-defined and organized budget. To achieve this, they should account for the loyalty program in relationship marketing, where the customer becomes their salesperson. Thus, they will not fear the results.
It is important to note that only an average of 30% of customers redeem points or cashback. This represents a low and non-impactful number if the company is minimally prepared and compares it to the high costs of traditional marketing.
Companies are already changing
Some companies have already noticed a decrease in sales when deadlines for point redemption are established. As a result, in some companies, even miles no longer expire.
Instead of setting deadlines for points or cashback, at Smartbis you can set the validity on the voucher to achieve better results. Thus, when the user receives the voucher with a deadline to use it, they already have the value in hand and can use it or donate it to a friend or family member.
In this way, the customer becomes your salesperson. They will be recommending your company to the people around them and consequently, there will be an increase in sales. The person referred will soon perceive your store as something that benefits them, thereby increasing the chances of them returning.