Two-thirds of loyalty program members are aware AI is being used to enhance their program experience through personalised rewards, customer service and support, smarter product suggestions, efficiency gains and fraud detection. But while they're ok with it for risk mitigation, service use is raising concerns.

The 13th edition of the For Love or Money 2025 study, conducted by The Point of Loyalty and First Point Research and Consulting, has shed light on the evolving landscape of customer loyalty programs in Australia. The study surveyed 1,010 Australian consumers aged 18 and above, all of whom are members of at least one loyalty program.

The research highlights that 66% of loyalty program members are aware of artificial intelligence (AI) being utilised to enhance their program experiences. The study explored six ways AI is transforming loyalty program experiences: Personalised rewards, 24/7 customer service, smarter product suggestions, automating routine tasks, fraud detection and prevention, and adapting program benefits based on individual engagement.

CEO of The Point of Loyalty, Adam Posner, stated, "With AI here, there and everywhere, I was keen to understand the impact on the loyalty program experience, from the members point of view."

The study found that 38% of members are most familiar with AI in customer service, such as AI-powered chatbots and virtual assistants. Posner continued, "From an awareness point of view, members are most familiar (38%) with AI being used within Customer Service such as AI-powered chatbots, virtual assistants and service agents. This was followed by the benefit of personalisation and relevance (28%) where AI analyses member preferences and behaviours to offer tailored rewards and benefits relevant to each member."

Despite the high awareness of AI in customer service, it also raises the most concern among members due to the lack of human contact.

"What is interesting, is the insight that members are most comfortable with AI detecting and preventing fraudulent activities in real-time, providing peace-of-mind," Posner continued. "While AI used for Customer Service had the highest awareness, members’ expressed the highest concern with this AI use, arguably due to there being little or no human contact."

The study also revealed 41% of members are loyal to both the brand and its loyalty program.

"Loyalty programs are not an island off the coast of the brand. The loyalty program is a promise and a proof point of the brand and members are seeing them as being connected," Posner commented.

Furthermore, 73% of members believe loyalty programs have improved in recent years, a significant increase from 51% in 2017. Posner said, "Program improvement has steadily increased over the past eight years and is validation of how the loyalty program industry has continued to innovate and improve its program propositions and member experience over the longer term."

The study identified five key benefits that members desire in exchange for their data: Saving money (70%), recognition (33%), saving time (31%), joy (30%), and relevance (30%).

"It’s clear loyalty programs and the benefits provided are an exchange for data and for the first time we have an insight on the five benefits members want when engaging with loyalty programs and exchanging their personal and purchase data with programs," Posner highlighted.

The Point of Loyalty, led by Posner, is a consultancy focused on customer loyalty and loyalty programs.