Methods to encourage customers to burn their loyalty points

FADO Go
4 min readFeb 21, 2023
Methods to encourage customers to burn their loyalty points

Rewarding points for users is a popular method in customer loyalty programs, but have you ever encountered a case where users accumulate points but do not use them to exchange gifts or discount codes? So what are the reasons and how can brands make customers use points without forcing them? Let’s find out in this article.

Making it easy to redeem points

The most basic thing when building a loyalty program is to make it as simple as possible, including a points redemption mechanism. Ensuring that the process is straightforward will allow members to redeem points online or in-store. Besides that, brands also need to provide clear instructions on how to exchange points and offer multiple options for reward redemption. Try to explain the mechanism for the customers in just one sentence.

Time is money

Time is indeed money, literally. That is why you should offer limited-time promotions and set an expiration date for points. Taking away points from customers after they expire might seem to be a cruel action, but it is indeed an effective method. When the expiration date is coming, plus the FOMO (fear of missing out) feeling will motivate customers to redeem points.

Similar to the points expiration date, limited-time promotions, such as bonus points or discounts on rewards, can motivate members to redeem their points. This also gives members a sense of exclusivity and urgency to take advantage of the promotion before it ends. Moreover, this method will help decrease the cart abandonment rate and boost sales.

Sending reminders

There is a chance that customers forget to redeem points, therefore it is necessary to remind them. Sending daily reminders to customers about the rewards they can claim and points expiration dates will help them remember to use their points. Reminders can come in various ways, via email, app notifications, SMS, etc. This method also makes customers feel valued.

Personalizing rewards

Customers might notice the rewards, but perhaps those rewards are not suitable or do not meet their needs, so they will ignore them and continue to wait. This is when brands must use personalizing tools to offer customers the right types of awards. Using data and insights to personalize rewards and recommendations for each customer group, based on their preferences and previous behaviors. For example, customers who are interested in technology will prefer discount codes for technology or electronics. This can make the rewards more relevant and attractive, and increase the likelihood that members will redeem their points.

Apart from personalizing rewards, the fact that customers store points may also be due to too limited categories of rewards. Offering a range of rewards that are attractive to different types of members can increase the chances that they will find something they want to redeem their points for.

Contests and auctions

Running contests is a known and effective way to increase sales and interact with customers. Contests can add a little excitement to your loyalty programs. A challenge-based competition to test customer skills, knowledge, and experience can be a solution. For example, in 2019, Samsung held a contest that allowed customers to take part by answering a question with just 250 points and a code for vouchers. They were asked to share their experience with Samsung Pay and how it changed their life. Customers could gain more entries by redeeming an additional 250 points for each answer. The prizes were a Samsung Galaxy Note 9, Samsung Galaxy A9, Samsung Galaxy watch, or a Samsung battery pack.

On the other hand, auctions are highly engaging, social, entertaining, and inexpensive. Businesses use these methods to strengthen relationships with existing customers and provide a classic experience with an auctioned event, product, or service. Customers can use their loyalty points to bid on auction items. It is a great way for members to burn their unused loyalty points. Companies can send members reminders and congratulations messages throughout the auction to encourage them to adjust their bids and stay until the end. When the auction ends, the points used to bid are deducted automatically from the winner’s account.

Customers who accumulate points without redeeming rewards are always a common issue in loyalty programs. In addition to the solutions mentioned above, brands can create new methods to motivate customers to use points.

About FADO Go

FADO Go is a blockchain- based platform that can help increase loyalty by building loyalty programs effectively and improving customers’ shopping experience.

FADO Go’s Loyalty Solution

The basic features of FADO Go’s Blockchain Loyalty solution:

1/ Issue and tokenize rewards points for customers as well as build membership tiers, generate coupons and vouchers on the blockchain

2/ Develop criteria for rewarding customers when shopping, interacting with business activities on social networks, supporting and referring businesses to friends and relatives, etc.

3/ The management system for partners or operations will automatically provide the necessary metrics to effectively manage customer programs.

Benefits of FADO Go’s Blockchain Loyalty solution:

1/ The security, transparency and immutability of blockchain technology are mined and applied to the reward system.

2/ Membership cards, coupons, vouchers by NFTs with many exclusive features and independent exchange in the market.

3/ The decentralized network of loyalty points connects users not only to the FADO Group ecosystem but also from different ecosystems, and easily converts reward points between companies participating in the platform.

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FADO Go

A blockchain-based platform that facilitates cross-border shopping by connecting consumers, brands, KOLs, and logistics providers on a decentralized network.