The New York Times reports that “this holiday season, 39 percent of shoppers plan to use rewards and cash-back offers to buy gifts for others, according to a PayPal survey … Nearly the same proportion of people said they would use their rewards points on items for themselves.
“Retailers are taking notice. These programs and the incentives that come with them will be critical to attracting shoppers, who are slowing their overall spending and holding out for deals before buying. Stores recruit customers into their loyalty programs throughout the year, but the programs become a major attraction at the end of the year — when retailers can make up to a third of their annual revenue. Retailers are also spending the year testing different incentive strategies, but they roll them out en masse during December.
“Customers see the benefit in these programs, with the money they spend getting rewarded through free products or other perks. One in four shoppers feels that buying gifts using rewards is getting something for free, according to the PayPal survey.”
KC’s View:
To some extent, I imagine, this ties into people’s skeptical views of the economy. If they’re worried about money and their financial prospects, they’re more likely to look for alternatives to cash and credit cards.
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