In light of the precarious state of the economy the past few years, you’d think people would be trying to save as much as possible. Indeed, there has been no end to the anecdotal evidence about consumers cutting back and saving up during these tough times. However, for all the penny pinching and discount shopping, there is one area where consumers are leaving significant value on the table—rewards programs. Each year at least $16 billion in rewards points and miles go unredeemed by consumers, according to a recent study conducted by the Cincinnati-based loyalty marketing group Colloquy in conjunction with the global commerce firm Swift Exchange. This amounts to roughly one third the value of the total loyalty rewards points and miles issued annually. In light of this, you have to wonder, why is such monetary potential wasted, and what can consumers do to prevent it from happening?

What accounts for unredeemed rewards?

Three main factors account for the prodigious value of unredeemed loyalty rewards: the sheer number and complexity of rewards programs, the difference in how people view rewards as compared to cash, and plain old consumer forgetfulness.

It seems as if everywhere you go, there’s an offer for a new loyalty program or rewards credit card. This could be at the gas station, the supermarket, the drug store, the airport, online…basically anywhere there’s a retail presence. And because these programs typically sound quite appealing and are often free to sign up for, there’s nothing stopping us from joining every one we come across. With the average household belonging to 18.4 loyalty rewards programs, according to Colloquy, it’s nearly impossible to keep up with each different program and diligently-redeem miles, especially considering the complexity of redemption policies.

While loyalty rewards provide the potential for financial benefit, they aren’t physical currency. We therefore tend to view them as being less important than cash, as something that can be disregarded or forgotten about. As a result, when we get busy, maximizing rewards potential isn’t a priority and the different programs we belong to just get lost in the shuffle.

How can consumers maximize rewards potential?

Just as there are explanations for unfulfilled rewards miles and points, there are ways to prevent their waste.

First, limit the number of rewards programs you belong to. You’re simply fooling yourself if you think you can sign up for this many rewards programs and ultimately keep up with and maximize the value of each. Limiting your memberships to a select few programs will therefore help prevent earned miles and points from piling up only to be forgotten about. The fewer loyalty rewards programs you’re in, the less confusing their redemption policies will seem as well.

Second, strive for no-hassle rewards. Cash back credit cards are great because rewards are earned as cash and redeemed in the form of statement credits or checks. You don’t have to do anything other than spend normally and reap the benefits.

Third, look for rewards that complement your lifestyle. Simply put, if you earn rewards that are related to something you do regularly, you’ll not only have more opportunities to redeem them, but you’ll also be less likely to forget to do so. Take someone who flies frequently with Southwest Airlines, for example. If this person gets a Southwest Airlines credit card, he’ll be naturally inclined to look into cashing miles in each time he books a flight, and these miles therefore won’t go to waste.

Fourth, conduct six-month rewards reviews. This doesn’t necessarily mean redeeming all of your points and miles at this time, but by looking into doing so you’ll familiarize yourself with each program’s rules and will be able to make a redemption plan based on impending miles or point benchmarks. But remember, if there’s no benefit in waiting to redeem, just pull the trigger. Ideally, you want to garner tangible benefits from your various rewards programs as consistently as possible.

Final Tips

While you should gravitate toward loyalty rewards programs that provide the most consistent, hassle-free perks, always be on the lookout for one-time deals. Often, simply by signing up for a new credit card or making a purchase at a store, you can garner a lot of value in discounts and free merchandise. Remember to close your accounts with these programs after garnering the one-time benefits though, or you’ll risk overextending yourself to the point where it’s difficult to maximize the value of each membership or get approved for a new credit card because of too many applications.

Odysseas Papadimitriou

Odysseas Papadimitriou

Odysseas Papadimitriou is the founder and CEO of Evolution Finance, parent company of both and Card Hub operates the nation’s largest gift card exchange and helps consumers compare credit cards and prepaid cards to find the best deals. WalletHub is the first social network built solely around personal finance, and enables consumers to compare, rate and review over 300,000 financial services and products, including banks, financial advisors, and car loans.

Mr. Papadimitriou previously worked at Capital One for nearly eight years. During this time, he garnered experience in multiple aspects of credit card operations, ranging from underwriting and risk management to new product development and marketing, where, as senior marketing director, he spearheaded the largest customer giveback in Capital One history. He is considered to be an industry expert in personal finance, and as such his views are routinely featured by leading news outlets such as The New York Times, CNN Money, The Wall Street Journal, TIME, Forbes and the Associated Press.