The question is not what’s missing, but who.
Two often overlooked consumer groups are younger consumers and lower-income consumers. Both shop, both prefer debit, and both are less likely to use loyalty programs.
Debit may be the most direct pathway to a larger, stickier loyalty base.
Same deal hunters, different wallet
Start with lower-income shoppers, a group PYMNTS Intelligence calls the Labor Economy: Workers earning no more than $25 an hour., representing nearly half of the U.S. workforce. When it comes to spending, a PYMNTS Intelligence study found that 31 percent of this group are active deal seekers, nearly identical to the 32 percent of higher earners looking for savings.
What differs is how they pay. Forty-three percent of Labor Economy consumers use debit most, versus 16 percent who use credit most. One in five didn't use a credit card at all in the past year.
Additionally. these consumers make less use of rewards apps, loyalty programs and bulk buying, which suggests savings available today carry more weight.
Where loyalty programs lose these consumers
Many programs lean on credit card rewards and repeat spending. For a household managing near-term cash flow, that design has three problems.
- The payoff is later. Points that take months to add up don't help a shopper deciding today whether the purchase fits the budget.
- It can require spending more. Thresholds and bulk offers ask shoppers to spend more up front.
- The ties to credit card use. Rewards that live on a credit card don't reach people who aren't using one.
The result is a shopper who is actively looking for savings and still never joins.
Debit is the way in
Debit is how these shoppers already pay, so it's where a loyalty program can meet them. Rewards on debit let consumers keep the payment method they choose and still get something back for it.
That turns every debit purchase into a chance to enroll a new loyalty member. The shoppers who were locked out of credit-based rewards now have a reason to join, and each purchase after that builds the relationship.
What debit-friendly loyalty looks like
For these consumers, loyalty works best when thresholds are low and redemption is simple. Here's what that looks like:
- Make value visible early. Show what the shopper earns or saves at the point of purchase, not just on a statement later.
- Keep thresholds low. A first reward within a purchase or two beats a big goal far in the future. Small, frequent rewards keep value flowing even on smaller purchases.
- Make redemption easy. Using what they've earned should take little effort.
- Earn with debit. Every debit purchase can earn points toward rewards, with no credit card required.
Cast a wider net
Shoppers with fewer discretionary dollars are still spending, just more carefully and mostly on debit. Younger consumers prefer debit, regardless of income level. Adding debit to an existing card program expands the audience for both spending and the loyalty program, and reaches shoppers that credit-based programs leave out.
If you're thinking about how to connect debit spending to loyalty, talk to us about card programs that put rewards where your customers already pay.
