No more free coffee on your birthday? Companies rein in customer rewards programs — here's why

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Reward programs, including birthday freebies and discounts, have long been a way for brands to build loyalty and incentivize spending. But now some companies are becoming a bit more stingy — and customers are taking notice.

Last fall, for example, many balked at Dunkin’s decision to stop offering a free drink on their birthday and instead give them triple loyalty points on their purchase. On June 1, Sephora started requiring a $25 minimum purchase for online customers looking to claim a free gift and 250 loyalty points during their birthday month. And Red Robina dine-in only and $4.99 minimum purchase requirement for customers to get their free birthday burger.

“While we’re assessing our own personal expenses, so are businesses,” Marshal Cohen, chief industry advisor of Circana and retail expert, told The Associated Press. “Businesses have to look and say, ‘Are these programs working? Are they working to full capacity? ... is there another way of doing this that wouldn’t cost us as much money?'”

Others say that drawing attention to what's “being lost” can also cause backlash — and it's better to provide clear alternatives for consumers to feel rewarded.

 

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