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Why are some frequent flier mile and other reward systems often so complicated?

Eric Barker
October 22, 2010

Many consumers today hold loyalty program points which function as a currency, but are not cash. This paper examines factors that influence consumers’ decisions to keep or spend their accumulated points. We found that consumers are more likely to spend points when they can easily anticipate the benefits they can enjoy with the points. Specifically, the decision to spend points is facilitated when it is easier to compute the percentage savings one can get by using the points. This computational ease has effects on point spending beyond that of saving magnitude.

Source: “The role of computational ease on the decision to spend loyalty program points” from Journal of Consumer Psychology

It’s the reverse of the sort behavioral economics-based recommendations you hear from Dan Ariely or Barry Schwartz for making things simpler to get compliance: subtle changes that make things slightly more difficult can produce big dropoffs in compliance. I’ve read similar research on rebate redemption.

TheRedArchive is an archive of Red Pill content, including various subreddits and blogs. This post has been archived from the blog bakadesuyo.

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Post Information
Title Why are some frequent flier mile and other reward systems often so complicated?
Author Eric Barker
Date October 22, 2010 8:56 PM UTC (13 years ago)
Blog bakadesuyo
Archive Link https://theredarchive.com/blog/bakadesuyo/why-are-some-frequent-flier-mile-and-other-reward.16642
https://theredarchive.com/blog/16642
Original Link https://www.bakadesuyo.com/2010/10/why-are-some-frequent-flier-mile-and-other-re/
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