Why do loyalty program rewards come with an expiration date?

Research tells us the easiest sale to make is to get your current customers to buy more; and it's less expensive to keep the customers you have than it is to get new ones.  

Loyalty programs are designed to help do this. By offering specials and rewards, they not only bring in more money and keep customers longer, they also can generate good word-of-mouth, social proof and customer referrals.

Like many people I belong to several rewards programs, one of which is Staples.  Staples has reduced their rewards significantly since I joined.  Duane Reade has too, especially since they were bought by Walgreens. 

The reduction in rewards from Duane Reade, which effectively translated into a price increase, was directly responsible for my moving most of my purchases to jet.com.

As for Staples, while I maintain my membership I have shifted many purchases to lower cost suppliers for the same reason.  But I do still recycle my ink there so I get a coupon from time to time. 

A few months ago, Staples combined two of my coupons in one email and led with the newest one.  As a result I missed the fact that the bigger coupon was expiring earlier, and had no opportunity to use it.

It may have only been for $8, but it made me mad.  I know that it's not a lot of money in the scheme of things.  But it was enough that loss aversion set in.  So a gesture that was supposed to make me feel good about being a customer instead made me angry. 

But it also made me wonder.  Why do loyalty coupons even have expiration dates?  If someone is a loyal customer why would a company care when they used their rewards, just as long as they did?

In August United Airlines announced that they would no longer impose a deadline to redeem frequent flier miles.  They join Delta and JetBlue.  But American Airlines is still requiring customers to earn or redeem miles every 18 months.  (Gazdik, 2019)

So, what do you think?  Why do companies do this?  Have you experienced the frustration of expiring rewards?  How does it make you feel about the company?  Have you shared your feelings with others?  Have you shifted your purchase patterns as a result?  Will you now favor United and Jet Blue over American?

Gazdik, T. (2019, August 29)  United Airlines Loyalty Miles Will No Longer Expire.  mediapost.com.  Retrieved October 8, 2019, from https://www.mediapost.com/publications/article/339941/united-airlines-loyalty-miles-will-no-longer-expir.html

Why in the world would anyone care how old Walgreens is?

Maybe I’m just bitter because after they bought my local Duane Reade chain they slashed the loyalty program and dropped many of my favorite name brands for generic products that don’t taste or work as well. 

But as a marketer, I just don’t understand why any company would tout the fact that they are 111 years old – especially a retailer.  Apparently it’s so they can brag about being the inventors of childproof caps and drive-through pharmacies.  And that’s supposed to make me want to shop there now?  Why? (Baar, 2012)

Personally I think their new smartphone app for prescription refills sounds interesting.  So, why not just talk about that instead of ancient history?

Baar, A.  (2012, August 11)  Walgreens Campaign Touts Its History Of Innovation.  mediapost.com. Retrieved August 15, 2012, from

http://www.mediapost.com/publications/article/180610/walgreens-campaign-touts-its-history-of-innovation.html