What Your Loyalty Points Are Actually Worth

Loyalty programmes have a quiet failure mode that the industry rarely says out loud: a very large share of what is issued is never redeemed. Not because people do not want the reward, but because the reward is stranded.

Eighty points at a café you have moved away from. A half-filled stamp card for a salon that closed. A balance in an app you deleted. Individually trivial, collectively enormous, and all of it was supposed to be yours.

Why points get stranded

Three design choices, each rational for the business issuing them, combine into a system that wastes most of what it creates.

They only spend in one place A balance that can only be redeemed where it was earned is only valuable if you go back. Most people do not go back often enough.

They expire Expiry exists to limit the liability on the business's books. It works — by destroying value that belonged to the customer.

They are invisible A balance you have to open a specific app to see is a balance you will forget. Forgetting is not an accident; it is priced in.

The difference between a point and a reward

A point is a promise from one business. A reward is something you can actually use. The gap between those two is where most loyalty value disappears.

The question worth asking about any programme is not what rate it pays. It is what fraction of what you earn you will realistically ever spend. A 5% programme you redeem from is worth more than a 10% programme you do not.

What one balance changes

When what you earn across many businesses lands in one place, three things stop being true: you stop forgetting it exists, you stop needing to return to a specific shop to realise it, and small amounts from many places add up to something worth spending.

That last one matters more than it sounds. Forty separate balances of two dirhams are worth nothing. One balance of eighty is worth a meal.

What businesses get out of it

This is not charity, and it is worth understanding the other side so you can judge whether the deal is fair. A business issuing a reward you will actually spend gets a customer who comes back and a cost that only lands when a real sale happened.

A business issuing a reward you will never redeem gets a liability on its balance sheet and a customer who feels vaguely cheated. The incentives point the same way as yours more often than people assume.

How to judge a programme

Ask three questions before you start collecting anything: can I see the balance without opening a specific app, can I spend it somewhere other than where I earned it, and does it expire.

If the answers are no, no and yes, you are not being rewarded. You are being asked to lend the business money at zero interest, with a decent chance you never ask for it back.