Only 50% of Australian Loyalty Program Members Actively Use Accounts

A record 93 per cent of Australian consumers hold loyalty memberships, but only 50 per cent actively used all their cards over the past 12 months, according to a 2026 survey by consultancy The Point of Loyalty.

The Australian loyalty program market is expanding by 13.5 per cent annually toward a valuation of $1.57 billion in 2026, as rising living costs push shoppers to seek savings.

The Scale of Inactive Accounts

A survey of more than 800 customers across Coles, Woolworths, Aldi, IGA and FoodWorks by Edith Cowan University researchers examined why consumers join retail reward programs only to neglect them.

Researchers Sanjit K Roy and Saalem Sadeque from Edith Cowan University found financial rewards alone fail to retain active users. Fatigue sets in quickly when redemption rules require high baseline spend, such as outlays of $2,000 to earn a $10 voucher. Shoppers abandon programs that demand excessive tracking or complicated checkout app interactions.

Supermarket Duopoly Dominance

Two major operators control most of the domestic membership base. Woolworths counts 14 million registered accounts in its Everyday Rewards network. Coles reports more than 9 million active members in Flybuys, which links grocery baskets with Wesfarmers-owned chains including Bunnings, Kmart and Target.

For retail operators across the Asia-Pacific region, these enrolment numbers look impressive on paper but mask balance sheet liabilities. Unredeemed points sit as deferred revenue obligations. Inactive accounts generate zero incremental basket value. Rivals that rely on upfront shelf discounting, such as ALDI, continue to capture price-sensitive volume without funding complex points administration.

Trust and Data Exchange

Shoppers surrender personal details, contact lists and payment patterns in exchange for program benefits. When retail pricing feels opaque or discounts appear trivial, participation drops immediately.

The university study identified three distinct operational levers that dictate whether a member remains active: institutional trust, relationship commitment and clearly visible return value. Programs that fail to send targeted offers lose out to straightforward discount mechanics. High-frequency users expect direct discounts on regular purchases rather than generic promotions on slow-moving inventory.

Friction in Reward Redemption

Security concerns also weigh on consumer willingness to maintain secondary retail memberships. Major corporate data breaches across Australia over recent years raised shopper scrutiny regarding who stores their purchase histories and contact records.

Competition will test whether broad coalition ecosystems hold an advantage over single-banner apps. Flybuys relies on cross-category earning power across home improvement and department store networks to keep accounts active. Woolworths counters by integrating fuel, insurance and pharmacy tie-ins directly into its digital wallet ecosystem.

Supermarket executives will watch the active redemption rate per registered member as annual retail data filings land later this year.