Consumers’ strategic point redemption behaviour in linear reward programmes
Giwon Son, Duk Bin Jun, Sungho Park, Yun Shin LeePurpose
This study explores consumer redemption behaviour in linear reward programmes – points-based, savings-type reward programmes in which points are redeemed at a fixed cash-to-points ratio and are subject to a validity period.
Design/methodology/approach
This study adopts dual process theory to examine how basket-related and expiration-related factors influence redemption behaviour through cognitive evaluation of the focal basket and affective responses, respectively. Specifically, we consider basket-related factors – basket size, non-points discount amount and the proportion of previously unpurchased items – and expiration-related factors – points expiration pressure and recently expired points. We analyse transaction-level purchase and point redemption data from a large-scale linear reward programme using a two-part model of whether consumers redeem points and how much they redeem.
Findings
Consumers redeem points strategically in response to both basket-related and expiration-related factors. Basket-related factors influence redemption through cognitive evaluation of perceived savings, perceived goal progress and perceived risk in the focal basket, whereas expiration-related factors influence redemption through affective responses associated with anticipated and experienced regret.
Originality/value
This study refines the understanding of point redemption in linear reward programmes by showing that redemption is shaped jointly by basket-related and expiration-related factors at the transaction level. By integrating these factors within a dual process perspective, it offers new insight into strategic consumer behaviour in point redemption.