Simple credit rewards work for older generations, but not for Generation Z

More than 80% of credit card users now receive rewards offers from their card issuers and on average, 72% of these rewards are used within 90 days. Meanwhile, 71% of consumers tell PYMNTS Intelligence they are very satisfied with the rewards their primary card issuers offer them.

These are just some of the data points revealed in our “The credit economy: the role of reward programs in the use of consumer credit”, a collaboration with i2c that explores the what, why And how card issuers should know when structuring their rewards programs in the future.

Data in the report confirms that on average 90% of consumers are interested in earning rewards in exchange for card activity. This is especially true for younger consumers: 94% of millennials and Gen Z consumers say they are primarily interested in collecting rewards points in exchange for card use, but baby boomers and seniors aren’t far behind, at 90% and 88%, respectively.

Asking the question: What kind of rewards do consumers want to earn?

The answer: it depends on the consumer. As the figure below illustrates, more than half (54%) of baby boomers and seniors prefer old-fashioned Money Back rewards on their purchases, while 37% are fine with receiving cash rebates on qualifying purchases.

Younger consumers, especially those in the ranks of Generation Z, are thinking a little more outside the box when it comes to identifying their reward wish list.

For example, 24% of Gen Z consumers would welcome subscriptions or memberships in exchange for ticket purchases. Flash sales also appeal to 16% of Gen Z consumers, which is significantly higher than the only 5.4% of older generations interested in flash sales. Similarly, about 12% of Gen Z shoppers would value access to tickets and referral programs, while baby boomers and seniors show little interest in these.

One reward that appeals to all generations of shoppers: free shipping costs on purchases. A third of Gen Z and Gen X shoppers say they would choose free shipping if it were offered as a reward, but so do 28% of baby boomers and seniors And millennials. And the simple appeal of earning points that can be applied to future purchases resonates with Millennials (30%) and Gen X consumers (28%) Gen Z shoppers (24%) And baby boomers and seniors.

These findings both underscore the cross-generational popularity of credit card rewards and identify the importance of tailoring rewards programs to the preferences unique to different segments of consumers.