Your Loyalty Points Are a Trap: Why 26.2% Go Unspent and What That Means for Your Brand

The 26.2% Problem: Your Points Are a Promise You're Not Keeping

Here's a number that should stop you cold: 26.2% of UK loyalty points go unspent, and 11.9% expire unused (Retail Gazette, citing Antavo's 2026 report). That's not a rounding error—that's a broken promise. You're telling your customers they're valued, then quietly letting that value evaporate. If you ran a store and 26% of your inventory rotted in the back room, you'd change suppliers. But we tolerate this in loyalty programs because we've convinced ourselves that points are a liability we can defer. I say that's cowardice. The unspent points aren't a cost-saving measure; they're a loyalty killer disguised as a balance sheet win.

Consider what the consumer experiences: they earn points, they wait, they watch them expire. Almost half of UK and Irish shoppers say it takes too long to earn rewards, and 41.1% are frustrated by expiring points (Retail Gazette, Antavo 2026). The result? They stop trying. They stop caring. And eventually, they stop buying. The Bond Loyalty Report 2025 found that only about one-third of loyalty programs are seen as delivering true value. So we're running programs that most people don't even believe in. That's not loyalty—that's a tax on goodwill.

Why Do We Let Points Rot? The Earn-and-Burn Myth

Most loyalty programs are built on an earn-and-burn model that assumes customers will eventually redeem. But the data says otherwise. Beyond the UK, American consumers are just as skeptical: 49% want no expiration of points (Antavo, 2025). And 38% want more ways to redeem—physical gifts, early sale access, anything that makes points feel real (Antavo, 2025). The problem isn't that customers don't want rewards; it's that we've made the rewards so hard to get and so restrictive that they're not worth the effort.

I've seen the classic response: "We'll make the points more valuable by adding tiers." Tiers are everywhere—59% of tracked brands use them (Euromonitor). But tiers often just add another layer of complexity. If you need to spend $500 to unlock a reward that's worth $10, you're not building loyalty; you're building resentment. The real issue is that we've confused the mechanics of loyalty with the emotion of loyalty. Points are a transaction. Loyalty is a feeling. And feelings don't expire.

The Bond Loyalty Report 2025 found that for the first time, special access and personal experiences became the top driver of perceived loyalty value—surpassing financial and transactional value. So what do we do? We double down on discounts. We're answering an emotional need with a coupon. No wonder satisfaction is declining—only 48% of Americans say they're very satisfied with their loyalty program (Bond, 2025).

The Real Fix: Make Points Feel Like Money

Here's my recommendation: if you're going to have points, treat them like a currency your customers actually want to spend. That means three things. First, make redemption easy and immediate. Nectar, the coalition program, is a great example: they revamped their eShops platform, expanded from 350 to 650 brands, and delivered three times as many points in the first five months as in the whole previous year (Nectar360). They also shifted toward smaller, more frequent redemptions. That's not an accident—it's a strategy. When points land quickly and can be used in small increments, they feel like a reward, not an IOU.

Second, stop letting points expire. The fact that 41% of UK and Irish consumers are frustrated by expiring points should be enough. But if you need a business case, consider this: when you let points expire, you're telling your best customers that their loyalty has a shelf life. That's not how you build a relationship. Amazon Prime doesn't expire your benefits because you didn't use them; they renew automatically because they understand that value is ongoing. Prime members spend $2,283 a year versus $916 for non-members (Rivo). That's a 149% increase. Do you think they'd see that if they let benefits lapse? No.

Third, personalize the rewards. 73% of shoppers want personalized loyalty rewards, but only 45% of brands offer them (Euromonitor). That's a massive gap. And it's not just about saying "we care"; it's about making the reward relevant. If a customer always buys coffee, don't give them a discount on tea. Use the data you have. Gartner predicts that by 2030, one in five loyalty programs will offer only fully personalized perks (CX Dive). The Home Depot's Pro Xtra is a good example of combining tiers with behavior-based discounts (Gartner via CX Dive). You don't need to wait for 2030—start now.

Don't Just Fix the Points—Fix the Relationship

But here's the deeper point: points are only a scaffold. The real loyalty comes from how you make people feel. HBR's research on customer emotions found that a bank's credit card designed to inspire emotional connection drove a 70% increase in usage among Millennials and 40% new account growth (HBR, 'The New Science of Customer Emotions'). That's not about points; that's about identity. An apparel retailer that reoriented toward emotionally connected segments saw same-store sales growth accelerate more than threefold. You can't buy that with a 5% discount.

So my advice is to stop obsessing over the points mechanics and start obsessing over the emotional payoff. Use points as a vehicle for recognition, not just a discount. The Bond Loyalty Report 2024 found that for four consecutive years, one of the top loyalty drivers is when program representatives make the customer feel special and recognized. That's a human touch, not a digital one. And it costs nothing.

Also, don't forget the referral loop. Referred customers are more valuable—at least 16% more valuable than non-referred customers, according to a Journal of Marketing study (CO Consulting). And referrals beget referrals: customers acquired through referrals make 31% to 57% more referrals (AMA). So make it easy for your loyal members to share their experience. A simple message tied to their own story—"You were referred in—now refer your friends!"—boosted referrals by more than 20% in a field experiment (AMA). That's a cheap win.

The One Thing to Remember

Your loyalty program isn't a discount engine; it's a trust engine (Gartner via CX Dive). If you keep letting points expire, if you keep making rewards irrelevant, if you keep treating customers as numbers, you'll get exactly what you deserve: a program that nobody cares about. The fix is simple: make points easy to earn, easy to redeem, and emotionally meaningful. Do that, and you'll turn 26.2% of wasted potential into 100% of engaged customers.

Sources

• Retail Gazette (Antavo 2026) - https://www.retailgazette.co.uk/blog/2026/02/more-than-a-quarter-of-loyalty-points-go-unspent-says-new-research/
• Euromonitor - https://www.euromonitor.com/
• Bond Loyalty Report 2025 - https://bondbl.com/news/the-bond-loyalty-report-released-in-collaboration-with-visa/
• Antavo US Loyalty Trends 2025 - https://antavo.com/blog/us-loyalty-trends/
• Gartner via CX Dive - https://www.customerexperiencedive.com/news/loyalty-program-discount-engine-trust-differentiation/822528/
• Rivo: Amazon Prime Loyalty Program - https://www.rivo.io/blog/amazon-prime-loyalty-program