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

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.

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