Cardholder redemption habits provide one of the clearest signals of how consumers engage with loyalty programs. Some cardholders redeem rewards frequently in small amounts, while others save for big-ticket purchases—or let points expire altogether. These differences matter: redemption behavior influences card usage, long-term loyalty, and the overall value financial institutions get from their rewards investments.
In this blog, we’ll explore:
- The three main redemption “types” — Burners, Earners, and Yearners — and how each group interacts with rewards.
- What recent industry research reveals about redemption behavior across generations and income levels.
- How cardholder redemption habits connect to engagement, satisfaction, and program design.
- Practical steps banks and credit unions can take to align redemption options—like card-linked offers, gift cards, and merchandise—with real member needs.
By understanding redemption habits, financial institutions can design smarter loyalty strategies that keep rewards meaningful and cards top-of-wallet.
| Redeemer Type | Generational Lens | Income Lens | Best Fit Rewards |
| Burners (Frequent Redeemers | Millennials & Gen Z (26.5%-34.9% redemption-to-earnings ratio) | Under $60K (higher redemption rates; rely on rewards for essentials) | Card-linked offers, gift cards, Real-Time Rewards, experiential rewards |
| Earners (Point Accumulators) | Gen X (high earnings but the highest expiration rate) | $100K+ (earn more, redeem less) | Card-linked offers, Real-Time Rewards |
| Yearners (Trophy Redeemers) | Boomers+ (lowest redemption rate at 14.6%) | $60K-$100K (Save for rewards like big ticket redemptions. | Experiential rewards, travel, high-value merchandise |
The Three Types of Redeemers: Burn, Earn, and Yearn
Cardholder redemption habits can be grouped into three behavioral buckets — and both generational and income-level data help explain why.
- Burners (Frequent Redeemers)
- Millennials and Gen Z are the most active redeemers, with redemption-to-earnings ratios ranging from 26.5% to 34.9%1.
- Cardholders earning under $60K also display “burn” behavior, redeeming at higher rates because rewards provide tangible everyday relief¹.
- These groups often direct spending toward essential categories, like groceries and wholesale clubs, where Primax reports the strongest debit growth2.
- Earners (Point Accumulators)
- Gen X stands out for high rewards earnings but the highest expiration rates, showing that points often sit unused1.
- Higher-income cardholders ($100K+) also lean toward “earn” behavior, accruing more rewards but redeeming less often1.
- Yearners (Trophy Redeemers)
- Boomers+ redeem at the lowest rates (14.6%) but also have relatively low expiration rates, indicating they’re saving for infrequent “trophy” redemptions1.
- Middle-income households ($60K–$100K) align with “yearn” behavior, saving rewards for larger purchases rather than frequent small redemptions1.
- Primax notes that Boomers+ have reduced discretionary spending, particularly in airlines (down 13.6% YTD in debit), reinforcing this cautious, save-for-later approach2.
How to Apply Cardholder Redemption Habits to Your Rewards Program
Understanding cardholder redemption habits is only half the equation. The real value comes from translating these insights into strategies that deepen engagement and strengthen loyalty. Here are three ways banks and credit unions can act on the data:
- Match Rewards to Everyday Needs
Frequent redeemers (Burners) thrive on immediacy. Offering card-linked offers, digital gift cards, and small-value redemptions ensures these members see rewards as part of their daily financial toolkit. Highlighting categories where spending is already growing—like groceries, wholesale clubs, and money services—keeps your card relevant in essential spend. - Re-Engage Earners Before Points Expire
Point accumulators (Earners) often let rewards go unused. Proactive communication—like reminders when balances are nearing expiration—can nudge this group to redeem. Pairing reminders with aspirational options such as merchandise catalogs or travel experiences increases the perceived value of using rewards instead of losing them. - Create Trophy Moments for Yearners
Trophy redeemers (Yearners) are motivated by big wins. For this group, emphasize high-value redemptions: experiential rewards, premium gift cards, or larger travel options. Position these redemptions as milestones, not just transactions. Seasonal campaigns—like a “2X Points on Travel”—can align perfectly with this mindset.
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