- Apr 27, 2003
- LT Gold
Ian Rogers at The Age this week reports that Citibank has provided a “rare window into the value of Credit Card reward schemes with the disclosure that customers on average waste one third of the value of rewards.
In financial statements for the bank's operations in Australia for the year to December 2003, and published by the Australian Securities and Investments Commission, writes Rogers, Citibank said that it made provisions for the redemption of credit card rewards based on the assumption that customers would ultimately redeem only 65.5% of reward points.
In 2003, Citibank paid out $27 million in the value of rewards to credit card holders, and maintained a provision of $16 million.
In loyalty programs overseas, the loss of accumulated rewards is estimated at between 3% and 50% on credit card schemes.
According to Grant Halverson, of McLean Roche "Australia has historically very high records of redemptions. However, that is clearly changing as a result of the restructuring by the airline industry of their programs, and by banks of their reward schemes."
"Qantas has increased the cost of their frequent flyer points and made it much harder to get them, and the bank-issued credit card schemes have cut the value of their reward points by up to 50%. Those actions will clearly affect redemptions."
This certainly doesn't sound like anyone from AFF forums. Does it :?: