New Upside research reveals most retail loyalty programs have hit a plateau

‍WASHINGTON, D.C. — Upside, the digital marketplace for brick-and-mortar retail, today released Escaping the Loyalty Plateau, a new report finding that most retail loyalty programs are failing to drive the behavior change they were designed to produce. Based on survey data from more than 12,000 U.S. consumers and retailers, the report shows that while 86% of shoppers say loyalty rewards matter to them, regular program usage lags way behind — leaving opportunity gaps of up to 48 percentage points.

“The loyalty plateau is a structural challenge, not a reflection of any individual program’s effort. As the landscape has saturated, consumers now juggle multiple memberships within the same category — and no single program can command the influence it once did. The retailers who will break through are those who shift their focus from merely growing enrollment to genuinely changing behavior among the consumers who are still deciding if they want yet another app on their phone.” — Dr. Thomas Weinandy, Principal Research Economist, Upside

Key Findings

Loyalty enrollment no longer signals brand exclusivity. The average loyalty member belongs to 2–3 competing programs within the same category, a sign of market saturation that limits any single program's behavioral influence.

Programs shift where consumers spend, not how much. Upside’s loyalty influence scores (scale of -100 to 100) range from 39.2 in grocery to 45.0 in restaurant. Programs are moderately effective at directing frequency and brand recommendations but are least effective at increasing total spending.

Most programs are targeting the wrong consumers. Between 55% and 60% of consumers across categories are “preference-first” — high in both brand affinity and price sensitivity and the most responsive to loyalty incentives. Yet most programs are built to reward already-committed customers, missing the persuadable majority.

Combining loyalty with a marketplace drives stronger retention. Upside’s transaction data from 5.5 million customers shows that pairing a loyalty program with Upside reduces month-one churn by more than 30 percentage points compared to consumers using neither.

As the loyalty landscape grows more crowded, the report offers a framework for understanding where programs stand today and what it takes to move forward. The full report includes a breakdown of consumer types, category-level influence scores, and retention data across millions of transactions. Download the Escaping the Loyalty Plateau report to understand what’s really driving — and limiting — loyalty program performance in 2026.

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Upside is a technology company that helps millions of people get more purchasing power on the things they need, and tens of thousands of businesses earn measurable profit. Our platform uses personalized, performance-based promotions to bring customers more value while ensuring businesses earn more profit — with no changes to their operations. For more information, visit upside.com.