Millennials Are Card Rewards Programs’ Most Loyal Customers

One might expect consumers of older generations, such as baby boomers and seniors, to be most loyal to brands or stores where they shop.

These consumers can have built familiarity and comfort with brands for a longer time and may be reluctant to explore new products. However, data showed that this simple assumption is not quite accurate.

According to “Leveraging Item-Level Receipt Data: How Card-Linked Offers Drive Customer Loyalty,” a PYMNTS Intelligence and Banyan collaboration, millennials are the most loyal customers to brands or merchants. Specifically, 32% of consumers considered loyal — those belonging to a loyalty or reward program — are millennials, leading the pack. There is some truth to purely age-based expectations, as 28% of these loyal consumers are baby boomers and seniors. Only 13% come from Generation Z, the least loyal age cohort of all.

The study examined how merchants using item-level receipt data can provide card-linked offers that, among other benefits, improve customer loyalty.

It found that 65% of card users shop with brands or merchants to which they are loyalty or rewards program members. If millennials are most likely to be loyal, it may be because they claim to be more satisfied with the use of card-linked loyalty programs than other generations, with 62% of millennials being very satisfied with the experience. Overall, 41% of the overall sample was very satisfied with card-linked loyalty programs. This evidence highlights millennials as a key customer segment for card-linked rewards programs.

Another PYMNTS Intelligence report produced in collaboration with Banyan revealed that more than 40% of customers participated in a card-linked offer program in the last year. The momentum of these programs has been seen in recent weeks. Cracker Barrel, for instance, said in November that its loyalty program is gaining traction. The program allows points to be earned on each dollar spent. Points can then be redeemed for menu items.

On the other hand, Chase is targeting consumers’ demand for food deals with new cash back offers, a move that comes as consumers seek card-linked offers from grocers. The banking company announced Dec. 15 new 5% cash back categories for the first quarter of 2024 — categories that rotate every quarter — and the list included deals at grocery stores as well as at grocery aggregator Instacart.

Chase and Cracker Barrel’s actions to foster customer loyalty through card-linked rewards programs align with the current market trends. As data collection and analysis become increasingly detailed and real time, merchants and issuers can use receipt-level data to customize and aim their offerings, putting millennials in their targets.