In the spirit of the holiday season here in the US, this article from the Wall Street Journal seems particularly appropriate:
In many cases, rewards enticed people whose cards were dormant to start spending…[and] even small rewards can prompt people to spend more.
This useful study backs up the old management consulting adage of “you get what you measure.” In this case, financial services companies measure a customer’s spending and show a clear link to a nominal reward. And voilà, we shouldn’t be surprised that customers then immediately think about what they can get, as opposed to saving the money in the first place. Rewards programs are an ingenious way to acquire customers and encourage spending, but this can be to the detriment of the customers themselves.
My point is that customers need to really question their spending habits in the first place, as opposed to jumping at offers no matter how lucrative they may seem. There are plenty of savvy product managers out there, and their sole job in cases like these are to get you to spend money. Instead of watching your checking account go down for “rewards,” how about watching your savings account go up for a change?