Across industries, loyalty programs are being tested by economic realities that make it difficult to deliver the same value members once enjoyed. Airlines are raising redemption thresholds, hotel chains are shifting to dynamic pricing, and retailers are rethinking how far points can stretch.
These changes, often labeled as ‘point devaluation’, reflect a broader challenge: balancing financial sustainability with customer trust. Inflation, supply chain pressures, and rising labor costs have forced brands to revisit the economics of their programs. For loyalty program members, even small shifts in redemption value can feel like a personal slight.
Loyalty360 spoke with industry experts from CORA Loyalty, Engage People, Switchfly, and ITA Group to explore how brands are adapting their loyalty economics while keeping value, fairness, and connection at the core.
Contributors
- Beth McCoy, CEO, CORA Loyalty
- Nick Relph, VP, Client Success and Head of Marketing, Engage People
- Ian Andersen, Demand Generation and Marketing Operations Manager, Switchfly
- Max Kenkel, Customer Solutions Manager, ITA Group
The Economic Drivers Behind Point Devaluation
Across industries, loyalty leaders are feeling the weight of the same macroeconomic forces reshaping the broader business landscape.
“In North America, inflation, higher labor costs, and supply chain disruptions are affecting operational budgets, which in turn influence loyalty programs,” says Beth McCoy, CEO of CORA Loyalty. “Brands aren’t trying to cheapen loyalty, they’re trying to survive. Adjusting reward economics is sometimes the only lever available without cutting core service. What looks like devaluation from the outside is often recalibration from within — an effort to keep the loyalty promise viable under new financial realities.”
This recalibration extends beyond cost control. It reflects a broader modernization of loyalty economics. Many brands are overhauling legacy systems to create greater flexibility and efficiency.
“Many programs are modernizing their tech stacks and data models, shifting from fixed-value models to more dynamic, demand-based pricing,” says Ian Andersen, Demand Generation and Marketing Operations Manager at Switchfly. “This gives brands better margin control but also makes changes in point value more noticeable. Ultimately, programs are recalibrating to protect profitability without losing sight of what makes rewards feel valuable to members.”
Brands making economic adjustments must weigh those changes against the emotional connection that drives long-term engagement.
Max Kenkel, Customer Solutions Manager at ITA Group, says programs perform best when they align financial value with human connection.
“One big driver of loyalty success is emotional connection. When brands get the value equation correct and nail the emotional connection, they create engaged customers who are eight times more likely to visit, to spend, and to give share,” Kenkel says. “I would use extreme caution devaluing a loyalty program and often our recommendations include ways to enrich the program, at least for key segments and groups that have high potential.”
The challenge for brands is to redefine what value means. The strongest programs balance financial realities with the trust-based elements that make loyalty enduring. Maintaining that balance depends on how brands bring customers along in the process.
Turning Transparency into Trust
Even the most well-intentioned recalibration can backfire if members don’t understand the reasoning behind it. In an environment where trust is hard-earned, transparency has become one of the most powerful tools for sustaining loyalty through change.
Nick Relph, VP of Client Success and Head of Marketing at Engage People, says many brands struggle to find the right balance between honesty and caution.
“In practice we see brands communicating the ‘why’ fairly inconsistently. Many are cautious about drawing attention to changes, which can create confusion and frustration if consumers notice lower redemption rates without context,” says Relph. “The most effective approaches focus on transparency with context — explaining that adjustments help manage the effectiveness and long-term viability of offering meaningful rewards.”
Devaluation tactics are sometimes implemented with little notice, which can exacerbate negative reactions and erode trust. While loyalty programs can withstand change, it's best when brands are transparent to their members, treating them as partners, not passengers.
Switchfly’s Andersen adds that communication isn’t just a compliance step; it’s an opportunity to reinforce brand value.
“We’ve seen a mix in proactive and reactive communication surrounding point devaluation. In many instances, it’s treated like fine print instead of a chance to tell a value story.”
Successful brands take the opposite approach and do the following instead of leading with the increase in redemption thresholds:
“Transparency goes a long way when it’s backed by something members can actually see and feel. When the message is about investing in a better program, not just adjusting costs, members are more likely to stay engaged and trusting,” Andersen says.
Ultimately, transparency builds resilience. When brands lead with openness and pair economic changes with visible program enhancements, members see the relationship as evolving. Communication is a tool for deepening credibility and strengthening emotional loyalty.
How Devaluation Shapes Perceived Fairness and Connection
The impact of recalibrating point values reaches far beyond financial metrics. For members, the value of points has a significant psychological component. Points often represent progress, status, and future rewards in the minds of program members. When that perceived value shifts unexpectedly, it can disrupt the sense of trust and fairness that underpins loyalty.
“Devaluations can erode trust if members feel the program is no longer rewarding,” says McCoy. “This is especially true for lower-tier or occasional members, who may feel disproportionately affected, while elite or high-value customers are often insulated.”
When certain segments experience the brunt of change more acutely, it can create an imbalance that undermines the brand relationship. Ensuring fairness across member groups, even when adjustments are necessary, becomes essential to maintaining long-term engagement.
Andersen says the emotional side of devaluation is often underestimated.
“In travel, for example, points often represent dreams of a future getaway, so changes can feel personal if they aren’t clearly explained. Even small shifts in redemption value can affect engagement and repeat behavior if they catch members off-guard. On the flip side, when brands are upfront about the reasons behind changes and give members time or options to adjust, trust tends to hold strong.”
Andersen’s perspective highlights a fundamental truth in loyalty management: perception often matters more than the actual change itself. Ultimately, fairness isn’t defined by how little a program changes, but by how thoughtfully it manages change. When members feel seen, informed, and respected, even difficult adjustments can strengthen rather than weaken their emotional connection to the brand.
Best Practices for Navigating Point Adjustments
Once a brand decides to adjust point values, it’s critical to develop a plan for rollout. Andersen says proactive communication is the most effective safeguard against negative perception.
“The best way to maintain trust is to communicate early and often. Members should hear about changes directly from the brand, not from social media or third parties. Offering a grace period where members can still redeem at prior rates shows fairness and helps ease the transition,” he says.
The idea of fairness plays a key role in how members respond. When brands pair transparency with tangible value, customers tend to view the program as evolving rather than retracting. CORA Loyalty’s McCoy notes that the strongest loyalty strategies reimagine value rather than reduce it.
“The best programs are creatively broadening the definition of value, not just lowering redemption charts. Members are remarkably forgiving when they still feel progress. Programs that expand partnerships or make points more usable, even at lower rates, keep emotional loyalty and trust intact.”
Relph of Engage People, suggests introducing new earning opportunities, bonus points, or expanded experiences to offset the potential impact.
“Tailor communications to tiers or activity levels so the message feels relevant vs. generic. Ensure communication follows clear rules — frequent, unexpected changes erode trust,” he says.
Across all perspectives, one theme stands out: predictability builds confidence. When members are informed, given options, and reassured their loyalty still holds meaning, even difficult adjustments can reinforce trust. Point value changes may be inevitable, but trust, when managed intentionally, doesn’t have to be a casualty.
Aligning Liability Management with Lasting Loyalty
As part of our Industry Perspectives discussion, we asked loyalty experts how brands can balance financial responsibility with meaningful member engagement. Their advice underscores a shared belief: liability management and loyalty impact don’t have to be at odds. When handled thoughtfully, they can strengthen one another.
For many brands, liability management is one of the most complex challenges in loyalty today. Unredeemed points sit as financial obligations on the balance sheet, creating pressure to reduce exposure, yet redemption is also the very heartbeat of loyalty. The goal is to find a model that sustains both financial health and emotional connection.
ITA Group’s Kenkel emphasizes that redemption itself should be seen as an investment, not a liability.
“Redemption is a linchpin of loyalty success. It reinforces the value, and it is a key driver of emotional connection. Without knowing every brand’s unique situation, our general recommendation is to identify, create, and sustain frequent redemption opportunities. Ideally, this is a mix of discounts, rewards, offers, and experiences.”
Encouraging regular redemption nurtures the member relationship. When customers see tangible progress and enjoy consistent moments of reward, the perceived value of the program stays high even during periods of adjustment.
Andersen of Switchfly, adds that smart liability management is ultimately about reframing value, not reducing it.
“Devaluation doesn’t have to come at the expense of loyalty,” he says. “The key is to view liability management as a way to create smarter value, not less of it. Instead of simply reducing the worth of points, brands can redesign how members use them, focusing on experiences that feel more rewarding without dramatically increasing costs.”
Together, their insights highlight a crucial takeaway: liability management is an opportunity to innovate around value. By creating frequent, attainable redemption moments and focusing on experiences that feel personally rewarding, brands can maintain fiscal balance while deepening the emotional foundation of loyalty.
Redefining Value, Preserving Trust
Point devaluation doesn’t have to weaken loyalty. The brands that succeed approach recalibration as a strategic evolution, one that’s grounded in transparency, fairness, and emotional connection.
Clear communication, thoughtful timing, and an unwavering focus on member value are essential to sustaining trust. When brands explain the why, provide flexibility, and reinforce progress through attainable rewards, members interpret change as stewardship rather than loss.
Ultimately, loyalty is built on confidence. Brands that lead with honesty, innovate around value, and prioritize being fair to all levels of members will weather economic shifts and emerge stronger, with deeper member trust and a more resilient foundation for growth.