Why easy redemption isn't always better redemption

Ms Chan

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Ms Chan

Welcome back to Loyalty Unlocked, the podcast where we dive into the strategies, psychology, and behind-the-scenes stories of loyalty programs.

Ms Chan

For full transparency, this podcast including the script and the voices is totally AI generated based on chapters from the forthcoming book on loyalty from my co-host, Mark Sage.

Ms Chan

Okay, so Mark, today, we’re talking about something that sounds totally counterintuitive? You deliberately make something harder for your customers?

Ms Chan

Why on earth would you do that? Isn’t easier always better?

Mark Sage

yeah, I know it sounds crazy at first! But designed in friction is actually a strategic tool. By intentionally adding a bit of difficulty or thought into a process, you steer customer choices in a way that benefits both them and the business.

Ms Chan

Wait, so you're saying it’s all about controlling choices. Like... nudging?

Mark Sage

Exactly. That term actually comes from behavioral economists Richard Thaler and Cass Sunstein. In their book, they define a nudge as any change to the way choices are presented that influences behavior predictably—but without removing options or altering incentives in any significant way. It’s... well—it’s subtle guidance.

Ms Chan

Hmm, okay, like what? Give us an example!

Mark Sage

Sure. One of the most famous examples is placing fruit at eye level in a school canteen. The idea is simple—when healthier options are more visible and easier to grab, people are more likely to pick them.

Mark Sage

In a sense, you're stacking the odds in favour of a behaviour that aligns with a specific goal.

Mark Sage

In this case, eating healthier.

Ms Chan

Ohh, sneaky! So, we're kinda having our choices influenced without even realizing?

Mark Sage

That’s right. And it doesn’t just apply to healthy eating either. You see it in all kinds of areas. When you try to unsubscribe from a subscription service like Netflix, it's typically not that easy.

Mark Sage

I don't mean the bad subscription services which sometimes ask you to call in or send a letter if you want to cancel - those making it super easy to join, but super hard to stop.

Mark Sage

I just mean where the option to stop the subscription is slightly hidden away, or where they double check if you're really sure you want to cancel.

Mark Sage

These options are designed to slow you down a little more so as to get you to consider your decision a little more.

Ms Chan

Ooooh, so the friction actually works to trigger consideration, not stop it?

Mark Sage

Exactly. It’s not about blocking decisions outright—it’s about giving people time to reflect, to be deliberate. That’s the beauty of designed in friction.

Ms Chan

Okay, but... doesn’t it feel like you’re walking a fine line here? I mean, making things a little harder—sure—but how do you stop it from becoming too frustrating for the customer?

Mark Sage

That’s a great question, and the balance really comes from understanding your customer’s behavior and goals. You want friction to guide them—not alienate them. For businesses, it’s also about creating value. A well-placed nudge can help both the customer and the brand, but only if designed thoughtfully.

Ms Chan

So, Mark, you talked about striking the right balance in using friction. Let’s delve deeper into how you managed that with yuu Rewards. Using friction in a loyalty program sounds super bold—how did you make that work?

Mark Sage

Well, with yuu Rewards, we introduced a concept called "Considered Redemption." Essentially, instead of letting members redeem points directly at the checkout, we added a step—they have to redeem through the app first, creating a coupon. This means they’re planning their reward redemption, rather than making impulsive decisions at the till.

Ms Chan

Wait, let me get this straight. You’re saying customers couldn’t just say, “Hey, I’ve got points, I’ll redeem them now” at the counter?

Mark Sage

Exactly. And here’s why. Redemption is a pivotal moment in loyalty programs. If it’s too easy, members might use their points without much thought—maybe they’d just knock a couple of dollars off their grocery bill. But by introducing that small step of app redemption, we found something amazing.

Ms Chan

Okay, now I’m curious... what happened?

Mark Sage

It turned out that members who went through the redemption process were planning their purchases more thoughtfully. This led to an average increase of 25% in their spending when they redeemed points.

Mark Sage

So they weren’t just redeeming. Instead, they were using it as an opportunity to buy more. And that’s additional value—not just for the business, but for the customers, too.

Ms Chan

Whoa, that’s... kind of genius. But weren’t people, like, annoyed by the extra step?

Mark Sage

You’d think so, right? But actually, we saw a lot of positive reactions. Members appreciated having that moment to think. And because everything is real-time—the coupon appears instantly in the app—it didn’t feel overly inconvenient. Members could redeem the coupon while standing at the checkout if they wanted - so we didn't stop real time redemption, we just nudged it towards considered redemption.

Ms Chan

So, basically, it’s about creating that pause. A little breathing room to reconsider and plan?

Mark Sage

Exactly. And this isn’t just anecdotal—it’s borne out by data. For example, we saw members planning their redemptions two to three days in advance. That’s intentional - considered - behavior. And they weren’t just thinking about points—they were thinking about what to buy, when to shop, and where to shop.

Ms Chan

And that mental connection to yuu Rewards—it’s like, wow, next level brand loyalty.

Mark Sage

Absolutely. That's why we call it Considered Redemption.

Mark Sage

When members are actively planning to shop with you, you’re staying top of mind—and that’s a real loyalty win you just can’t buy. Plus, the bigger baskets add measurable, significant lift to both the program and the partner brands.

Ms Chan

Okay, got it now. So the friction isn’t just about making things hard—it’s about adding, like, real value to the behavior.

Mark Sage

Yep. At its core, it’s about aligning that friction with thoughtful outcomes. And when it’s done well, everyone benefits—the members, the business, the partners—it’s a win-win across the board.

Ms Chan

That idea of using friction thoughtfully is fascinating. But it makes me wonder—what happens when it goes wrong? Too much friction can easily tip into just being frustrating, right?

Mark Sage

There’s definitely a point where the balance tips, and instead of guiding customers, you’re alienating them. It’s why understanding context is everything—different scenarios require different levels of friction or convenience. A misstep can undo all the good intentions.

Ms Chan

Right, so do you have an example of where that balance kind of... flopped?

Mark Sage

Well, in the early days in Nectar in the UK, we implemented real-time redemption at till, allowing members to use their points instantly and removing the friction of redemption - trying to make it ridiculously easy to use points. Sounds amazing, right?

Mark Sage

Except it wasn't.

Ms Chan

Wait, how? You’d think customers would love that.

Mark Sage

Well, points were redeemable instantly, no thought process required. But what happened was... engagement dropped. Customers were treating the program more like a simple discount card rather than a loyalty platform. They were just using points from the last purchase on the next purchase. They weren’t thinking about their points and their shopping habits didn’t change.

Ms Chan

Oh, no way! So, making it too easy actually made it... less valuable?

Mark Sage

Exactly. Loyalty programs aren’t just about giving people something extra—they’re about shaping behavior and creating meaningful interactions. When you remove all the strategic elements, you lose the emotional and practical ties that keep members engaged.

Ms Chan

Okay, so the sweet spot is like, friction that adds purpose, right?

Mark Sage

You’ve got it. It’s like the yuu Rewards example we discussed—with the extra redemption step, we created a moment of consideration, and that boosted both customer engagement and spending. What matters is knowing when to add friction and when to remove it. Amazon’s one-click checkout is a great example of removing it—perfect for cutting abandoned carts in online shopping.

Ms Chan

Hmm, so it’s not about friction vs. convenience—it’s more like finding the perfect balance for the situation?

Mark Sage

Balance is the right way to look at it. It’s a spectrum, not a binary choice. Different kinds of customers, different touchpoints, and different goals all influence where you pivot. The key is designing the experience with intentionality—keeping the customer at the center while aligning with your objectives.

Ms Chan

So... it’s all about strategy.

Mark Sage

Totally. When you get that strategy right, you’re not moving customers through a transactional cycle—you’re creating consideration. Getting customers to stop and think a little. And that’s what loyalty is all about.

Ms Chan

That’s a game-changer! I feel like every loyalty marketer needs to hear this. Before we wrap up, what’s one last piece of advice for brands designing their loyalty strategy?

Mark Sage

Always start with the end goal in mind. Do you want to just give out discounts, or do you want to drive real engagement and spend? Sometimes, the best way to create value isn’t by making things easier—it’s by making them more meaningful.

Ms Chan

Love it! Mark, this has been such an insightful conversation. Where can people find out more about your work?

Mark Sage

Thanks! They can check out some early chapters from my book at the link in the show notes, and of course, keep tuning into this podcast!

Ms Chan

Well, thank you for sharing all these insights. I’m sure our listeners learned as much as I did. And that’s all for today’s episode of “Loyalty Unlocked.” See you all next time!