Have you rewarded yourself lately? Everyone loves a bonus, which is one reason the customer rewards industry has been around for more than a hundred years.
Sperry & Hutchinson pioneered the idea in the late 1800’s, with a loyalty program based on green stamps. You received S&H green stamps according to the dollar amount of your purchase when you shopped at participating retailers, and you turned in the stamps to claim a reward of a small gift or other useful item.
After a century, S&H green stamps disappeared, at least in physical form. Now you can find them on the Internet as GreenPoints, which proves that when something is lucrative, it will be reinvented.
Profitability means others will want to share in the wealth, too. Enter AT&T’s Universal Card. When you used the company’s credit/reward card, you got a cash discount on your phone bill.
Then came Diners Club, with the first travel rewards program. Two years later Discover jumped in with a cash back arrangement. Other programs featuring retail, dining, hotel, and banking rewards followed.
Reward cards are big business, and their use more than doubled between 2001 and 2005. Growth has slowed a bit these days, as associations offering the cards are feeling the squeeze from fee-capping legislation. This could mean future reward programs may be worth less or slashed entirely—or they could be reinvented in a new, more lucrative, guise.