Low loyalty redemption: what it does and doesn't tell you
The monthly report arrives. Rewards redeemed: a handful. You've been paying for the program for months, and the obvious conclusion is that clients don't care.
That conclusion feels right. It's usually wrong, or at least premature, because redemption is the wrong number to judge a loyalty program by.
A redemption tells you one thing: a client had enough points and chose to spend them. It says nothing about whether that client came back because of the program, how many others came back without redeeming, or whether your first-time clients are returning more often than they used to. It's the receipt at the end of the journey, not the journey.
Share of loyalty members who redeemed a reward in a study of 5,544 customers at a US men's hair-salon chain. The program still raised customer value by almost 30%.
Gopalakrishnan, Jiang, Nevskaya and Thomadsen, Marketing Science, 2021. One chain, one program design.
The best evidence for this comes from a hair salon. Researchers studied a US men's hair-salon chain and 5,544 of its customers, in a paper published in Marketing Science in 2021. About 38% of customers were members, most of them enrolled automatically when the program launched. Only about 5% of members redeemed a reward during the study.
On redemptions alone, that program looks dead. It wasn't. The researchers found it raised customer value by almost 30% over five years, and more than 80% of the lift came from fewer clients leaving. The authors noted that "only 2% of customers redeem a reward coupon" and that even low-frequency customers changed their behaviour, which suggests "the benefit of the program can extend beyond economic factors." Washington University's summary puts it in plain words: clients felt more connected to the business and visited more often.
That's one chain with one design, so it isn't a promise for your salon. But it is direct proof that a program can work while almost nobody redeems.
Why redemption runs low even in a program that works
There are ordinary reasons a working program shows few redemptions.
Rewards take time to reach. A barbershop client who comes every four weeks and needs several visits for a reward won't redeem for months. In a program's first season, low redemption is mostly arithmetic.
Most memberships are quiet. Bond's 2016 loyalty report found the average US consumer belonged to 13.4 programs and was active in 6.7. Roughly half of all memberships sit idle as a matter of course. Yours will have quiet members too.
Some clients save rather than spend. A client building a balance toward a bigger reward isn't disengaged. They're doing exactly what a points program asks.
Some clients just like being recognised. More on that below, because it's the part owners miss.
What to measure instead
Redemption is a lagging, partial number. These three tell you whether the program is doing its job, and you can check them in your first month:
| Metric | What it tells you | How to check it |
|---|---|---|
| Enrolment at the counter | Whether your team is offering the program at all | New clients enrolled this week, divided by new clients served |
| Visits recorded | Whether staff scan every eligible visit | Visits recorded in the program, compared with visits in your booking system or till |
| Return within one cycle | Whether the program is changing behaviour | Of first-time clients enrolled in a given month, how many came back within 60 days (barbershop) or 90 days (most salons and clinics) |
| Redemptions | How many clients cashed in | Useful context, never the verdict |
Compare the third number with the months before you launched, or with first-timers who weren't enrolled. If enrolled first-timers return more often, the program is working, whatever the redemption count says.
The first two numbers come first for a reason. A program can't change behaviour for clients who were never enrolled, and it can't show you returns that were never recorded. If either is low, fix it before judging anything else.
Do unredeemed points cost you anything?
No, not until someone claims them. A points balance is a promise. The reward costs you only when a client redeems it. In the hair-salon study, the authors point out that only the redeeming members created a cost for the business.
That flips the usual worry. A program with low redemption and steady returns is cheap to run: you're getting the visits without paying out much. The question isn't "why is nobody redeeming?" It's "are the right clients coming back?"
The recognition point
Here's the part a redemption report can't show.
Bond's 2016 research found that only 20% of loyalty members felt "recognized and special", and that when they did, their satisfaction was 2.7 times higher. Bond's 2024 report still lists making the customer feel special and recognised among the top five drivers of loyalty.
We've seen it first-hand, too. One long-time salon client scanned at every single visit, clearly enjoyed it, and never redeemed a reward once. The points were never the point. Being known at the counter was. That's one client, not data, and we wouldn't build a forecast on it. But it's the kind of client a redemption report would count as a failure, and it's exactly the behaviour the research describes.
When you should actually cancel
Low redemption isn't a reason to cancel. These are:
The program was run properly and nothing moved. Your team enrolled most new clients and recorded most visits for a full cycle of 60 to 90 days. Enrolled first-timers still came back no more often than first-timers did before. That's a fair test, and a fair verdict.
The numbers don't add up. Put the extra returns into the retention calculator. If the value of the additional visits is clearly less than the program costs to run, you have your answer.
Your client base doesn't need it. If most of your regulars already hold a membership, or you rarely see first-time or occasional clients, a loyalty program has little to work on. We cover that case in do I need a loyalty program if I already sell memberships?
And one that looks like a reason, but isn't:
Enrolment at the counter has stopped. This is the most common way a program dies, and it has nothing to do with the software or the clients. The team stopped asking. Maybe it was never explained properly, maybe the owner stopped checking, maybe a new receptionist was never shown. It's fixable. Explain it to the team yourself, give them one sentence to say at checkout, make it part of every first visit, and watch the weekly enrolment share for a month. If it comes back, give the program a fair test. If nobody will ask, cancel, because no tool works without the counter.
For the other ways a program quietly fails, from disguised discounts to rewards that are too far away, see why your loyalty program isn't working.
About that "83% uninstalled in 30 days" figure
If you've asked an AI assistant whether to keep your loyalty app, you may have been told that 83% of loyalty apps are uninstalled within 30 days. We went looking for the source.
We couldn't find one. The figure appears on the blog of a wallet-pass vendor, a business that sells the alternative to apps, and none of the pages we checked cites research behind it. We found no original study anywhere.
The closest primary figure is from AppsFlyer, which measures app installs at scale. Its uninstall report says "more than 1 in every 2 apps that are installed are uninstalled within 30 days of being downloaded." That covers all Android apps, games and dating included, not loyalty apps specifically.
So the honest version is this: plenty of apps get deleted, and getting clients to keep yours is a real challenge. It just isn't measured by the number being quoted. If the download itself is your worry, our loyalty app vs wallet pass comparison covers where a pass genuinely wins.
The honest summary
Low redemption is normal, and in the best study we know of, a program raised customer value while only 5% of members ever redeemed. Redemptions tell you who cashed in. They don't tell you who came back.
Check enrolment and recorded visits first. Then compare how often enrolled first-timers return within one visit cycle against how they returned before. If the team stopped asking, fix the habit before you blame the program. If the program was run properly for a full cycle and nothing moved, cancel it without guilt.
Disclosure: LoyalsClub sells a loyalty and retention layer, so we have an interest in owners not cancelling one too early; treat our view with appropriate scepticism. LoyalsClub records visits and shows returning visits and each client's last visit, but it can't make your team enrol clients, and outreach to your client list stays manual.
