Trying to lure customers back to stores, many brands are making their loyalty programs more generous. Last week both JCPenney and Office Depot unveiled revamped loyalty programs, promoting a series of new benefits including rollover points and VIP tiers. From the consumer perspective, more benefits are obviously better. But is this a good strategy for brands?

Many of the new loyalty benefits fall into the optimal zone mentioned in L2’s Loyalty report, substantially increasing customer satisfaction without being difficult to implement. For example, JCPenney Loyalty members receive invitations to exclusive shopping events where they can earn rewards more quickly, and Office Depot shoppers fall into tiers depending on their Loyalty status.

Consumer satisfaction

However, L2’s study also makes clear that every loyalty investment should provide equal value for the brand and the consumer. When the value exchange is overly skewed towards consumers, brands are forced to fund expensive loyalty programs without much return on investment. While Office Depot has already piloted its program in select markets, it may be too early to tell whether the program benefits the retailer as much as it does consumers.

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