Ask 1,000 cardholders what would most improve their rewards program, and the answer comes back with unusual clarity: 37.2% say cash back, nearly two-to-one over the next choice, and the most stable finding across every wave of ampliFI’s new research report, The Activation Gap.1
For a financial institution loyalty leader, that number lands like a directive: raise the cash back rate, simplify to cash, compete on the percentage. And that reading leads straight into a trap, because competing on rate is a contest a community financial institution cannot win and shouldn’t enter. Larger issuers and fintechs can often compete more aggressively on rate.
The better move is to read the whole survey. Because when you put the cash back finding next to the two findings that surround it, cardholders aren’t actually asking for a number. They’re describing an experience. And that’s a contest a community financial institution can win.
Three Findings, One Brief
The survey tested rewards preferences three different ways, and the pattern across them is the real headline.
First, the stated preference. Asked to rank desired improvements, 37.2% of cardholders put cash back first. Clear enough on its own.
Second, the behavioral test. Offered 5,000 points worth $50, 59% of cardholders chose a cash-equivalent option — but 41% didn’t.
Nearly 12% took $75 in travel value. Another 11% chose gift cards, and 14.4% chose to save toward a larger purchase. When the program delivers value visibly, a meaningful segment of cardholders trades cash for enhanced value without hesitation.1
Third, the ideal program. Asked to design their ideal rewards program from a feature list, cardholders clustered on three features far above everything else: high cash back (62.9%), easy, flexible redemption (51.8%), and no expiration on points (48.0%).1
Read together, those three pillars describe a single coherent brief: monetary value, delivered without friction, that doesn’t expire before the cardholder can use it.
Cash back is what cardholders ask for when their current program frustrates them, when points feel opaque, redemption feels like work, and value evaporates on a schedule they didn’t set. Cash is the word cardholders use for “value I can actually get.” The request isn’t really about the currency. It’s about the certainty.
McKinsey’s loyalty research reaches the same conclusion from the program side: a clunky redemption process is a named driver of breakage — value earned and never used — and simplifying redemption sits among the highest-leverage moves a program can make. The frustration cardholders express as “just give me cash” is the same frustration McKinsey measures as points dying on the balance sheet.2
The Tiebreaker Finding Settles It
If the three-pillar reading felt like an interpretation, the survey included a finding that removes the ambiguity.
Cardholders were asked what would decide between two cards offering identical rewards value. 43.1% chose flexibility or friction reduction alone — rewards that are more flexible or easier to use (22.6%), or the easiest redemption process (20.5%). Trust in the institution came next at 17.1%. Better travel perks and a better mobile app trailed far behind.1
Sit with what that means: when the rate is equal, the rate is irrelevant. The card that wins is the one that requires less of the cardholder to activate its value. Flexibility and friction aren’t tie-breaking nice-to-haves; they’re the decisive variables in nearly half of all evenly-matched decisions.
That is the strongest possible argument that program architecture, not rewards rate, is where the competition actually happens. It’s also the intent-vs-action gap — the finding The Activation Gap is named for — showing up at the point of choice: when base value is equal, the card that requires less to activate wins.
Why Rate Is a Race You Don’t Want to Win
There’s a second reason the “just raise the rate” reading fails, and it’s economic rather than behavioral.
A rate is the single easiest thing in loyalty to copy. The moment a program’s differentiation is a percentage, its differentiation has a shelf life of one competitor announcement. Fintechs with venture subsidies and national issuers with interchange scale can sustain rate wars that community institutions structurally cannot, which means competing on rate isn’t just weak positioning; it’s a strategy that hands the terms of competition to the institutions best equipped to bleed you.
The experience side of the ledger pays, too. PwC’s customer experience research found consumers will pay up to a 16% price premium for a great experience, and that 32% will walk away from a brand they love after a single bad one.3 Experience isn’t the soft alternative to rate. It’s the variable with the bigger economics attached.
Architecture doesn’t copy that way. A program that surfaces value where cardholders already look, prompts them at the moment they can act, and reduces redemption to a few clicks — that’s a system, not a number. Systems compound. Rates just reprice.
What This Means for Your Program
Three practical translations of the data:
Treat the cash back demand as a symptom, not a spec. When cardholders in your portfolio ask for cash back, hear the underlying complaint: value they can’t see, redemption that feels like work, points that expire before they matter. Fixing those often satisfies the request without touching the rate.
Audit against the three pillars, not the competitor’s percentage. Is value visible where cardholders already are? Is redemption at the few-clicks standard? Does anything expire in ways cardholders discover after the fact? Those three answers predict engagement better than any rate comparison.
Reserve rate moves last. Rate has a role, but as the final calibration on a well-architected program, not the strategy itself. The tiebreaker data says nearly half of cardholders will choose on experience when value is even. Build the experience that wins the tie, and the rate only has to be competitive, not heroic.
Cardholders told us what they want, three different ways. It wasn’t a bigger number. It was a program that keeps its promise without making them work for it, and that’s a program design question every institution can answer.
The full findings are in The Activation Gap: The 2026 Cardholder Rewards Report.Methodology, behavioral archetypes, generational insights, and the complete preference breakdown from our research with 1,000 cardholders. |
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Ready to make your rewards program easier to use—and harder to pass over? Let’s explore how your institution can compete on experience, beyond the cash back rate.
Sources:
1ampliFI Loyalty Solutions, The Activation Gap: What 1,000 Cardholders Told Us — The 2026 Cardholder Rewards Report (N = 1,000, fielded May–June 2026)
2McKinsey & Company, “Next in Loyalty: Eight Levers to Turn Customers into Fans”
3PwC, Experience Is Everything: Here’s How to Get It Right