Think about the last time you joined a loyalty program at a store you love. At first, it sounded great: earn points, get rewards. But then you realized you had to spend $20 to earn 1 point… and needed 100 points for $10 off. That’s $2,000 in spend for a $10 reward. Not exactly motivating.
This is where many loyalty programs lose momentum.
Loyalty programs have incredible potential. When designed thoughtfully, they can drive repeat visits, increase spend, and build long-term relationships. Most programs don’t fail because loyalty is a bad idea, they struggle because small, fixable gaps hold them back.
In this blog, we’ll walk through five common reasons loyalty programs fail and what you can do differently.
On paper, a lot of loyalty programs look fine. Points are earned, rewards exist, and customers technically benefit over time. But when you look closer, the perceived value isn’t there. Most customers are members of a lot of loyalty programs. In fact, the average Canadian belongs to 22 loyalty programs, but only actively uses 9 of them.
That gap usually signals one core issue: the perceived value of rewards doesn’t align with customer expectations.
If customers don't feel like they're getting any value out of a loyalty program, they're probably not going to bother checking it or using it much. For instance, one benchmark suggests the average redemption rate for loyalty rewards globally is approximately 50%, meaning roughly half of potential value remains unused across programs.
Furthermore, customers are more likely to spend more when a program feels genuinely rewarding. Loyalty members who redeem rewards spend significantly more; studies find that members who redeem rewards spend around 3.1× more annually than those who don’t.
How to offer rewards that your customers love:
DataCandy client, Mr. Puffs dramatically improved their rewards engagement by making their loyalty program fun and relevant. When they launched Puffs Points with a creative Olympics-themed promotion (offering six free puffs every time Canada won a gold medal) they saw membership grow by 317% in just two weeks and member sales jump 68% month-over-month.
The lesson here is simple: rewards don’t need to be huge, they just need to feel fair, relevant, and attainable.
When it comes to loyalty programs, less really is more. Customers don’t want to feel like they’re studying for a quiz just to earn a reward. If a program has too many rules, confusing point systems, or hidden fine print, it quickly starts to feel like work and that’s where engagement drops off.
Loyalty programs live in quick, busy moments: checkout, ordering online, or grabbing something on the go. If customers have to pause and think, “Wait… how does this work again?” you’ve already lost them.
Confusion creates friction. And friction is one of the fastest ways to turn an active loyalty member into a passive one.
When a loyalty program feels complicated:
Over time, loyalty becomes something customers technically belong to, rather than something they actively use.
How to make your loyalty program user-friendly:
A great example of a simple, effective loyalty program is DataCandy client Global Pet Foods. Their Pet’s Rewards program uses an easy, punch-card-style system—buy a certain number of bags, get one free. This straightforward approach earned them a third place spot in LoyalT’s top ten rewards program in Canada in 2025.
I don’t know about you, but I’m probably part of at least 30 loyalty programs. With so many memberships competing for attention, it’s easy for a program to fade into the background, especially if a brand isn’t actively reminding customers why it matters.
Signing someone up is only half the battle. If customers don’t hear from you again, they’ll forget they ever joined.
Loyalty programs need regular touchpoints to stay top of mind. If customers aren’t reminded that they’re earning points, unlocking rewards, or getting exclusive perks, the program fades from their memory.
When loyalty programs aren’t communicated consistently:
The most effective loyalty programs don’t rely on customers to remember, they build reminders into the experience.
How to fix it:
When customers regularly hear from you and see real value in your program, loyalty stops being forgettable and starts driving repeat business. With DataCandy’s automated offers, you don’t have to manually plan or send every message. Once your rules are set, the right reward or reminder is delivered automatically.
A loyalty program helps you understand how customers shop, so you can use real data to create personalized offers based on what they actually care about. Personalization helps customers feel noticed, appreciated, and understood.
Personalization matters because loyalty works when rewards reflect what customers genuinely care about. A one-size-fits-all reward might appeal to some, but it will fall flat for others. When offers are based on real shopping behaviour (favourite products, preferred categories, or how often someone visits), they feel relevant instead of random. In fact, 91% of customers are more likely to shop with brands that deliver personalized offers and recommendations. Additionally, personalized emails and offers generate 6x more transactions than generic campaigns, turning engagement into real revenue.
Without personalization, even a well-structured program can feel disconnected from the customer experience.
When loyalty programs aren’t personalized:
Over time, the program stops strengthening relationships and starts blending in with everything else in a customer’s inbox.
How to offer meaningful and personalized rewards:
Personalizing offers for each customer helps ensure your loyalty program delivers value that actually fits their needs and preferences.
Once a loyalty program is live, it’s easy to assume the hard part is done. The points are being earned, rewards exist, and customers are enrolled; so it must be working… right?
The problem is that loyalty programs aren’t static. Customer habits change, prices change, and what felt motivating six months ago might not land the same way today.
Loyalty programs are meant to influence behaviour: more visits, higher spend, stronger relationships. But if you’re not looking at the data, you can’t tell whether the program is actually doing that.
Without visibility, it’s easy to miss simple opportunities to improve. A reward threshold might be just a little too high. A promotion might sound good but rarely gets redeemed. Over time, the program keeps running, but it stops evolving.
When loyalty programs aren’t measured or adjusted:
How to use data to optimize your loyalty programs’ performance:
With DataCandy’s built-in insights and reporting, you don’t have to guess what’s working. You get clear visibility into customer behavior, reward performance, and ROI.
When rewards feel valuable, the program is easy to use, communication is consistent, and offers feel personal, loyalty becomes something customers genuinely want to engage with.
The upside is significant. A well-run loyalty program can drive more repeat visits, increase average spend, and strengthen long-term relationships with your best customers. By fixing small gaps and using data to guide improvements, you can turn your loyalty program from a “nice extra” into a powerful growth engine for your business.