The dark side of the pressure exerted by loyalty programs on consumers: Practical and ethical issues

Abstract

Despite its virtuous effect on consumption level and frequency of purchase, the pressure that loyalty programs exert on consumers can also be detrimental to their psychological well-being. Through three studies (N = 461), we show that perceived pressure increases feelings of regret and discomfort in the relationship, and decreases consumer well-being. The perceived value of the program positively moderates these effects. We also evaluate the impact of three program characteristics likely to generate pressure: the points expiration deadline, the points threshold to obtain the benefit, and possible demotion to a lower status. Only demotion to a lower status appears to exert significant pressure. Our findings highlight the trade-off that managers need to find between the quantitative performance of their loyalty programs and their impact on customers’ well-being.