The devaluation treadmill is a trust problem

The argument

The register profiles 217 programmes and knows tier status for 214. Of those, 112 run tiers. Tiers are not a neutral design choice. They promise recognition that can be withdrawn later. When a programme raises the points needed for the same reward or lowers the value of a point, it changes the deal after members have already shifted behaviour. That is a trust event, not a mere price adjustment.

Counts by sector show where the devaluation treadmill lives. All 61 airline programmes with known tier status run tiers. All 18 hotels do. Airlines and hotels sell promises that mature months after purchase. Their members hold balances and status expectations over time, so continuity matters. Grocery shows zero of 18 programmes with known tier status running tiers. Fuel shows zero of 12. Banking runs tiers in only 1 of 14. These sectors settle value at the till or on statement and do not ask members to store value for a future claim. The devaluation risk is concentrated in the businesses that ask members to trust future recognition.

A point is not a currency. It is an option on a future price that the programme alone sets. The programme controls both earning and redemption. Each devaluation tests whether a saved balance keeps its meaning. One devaluation can be explained as a correction. A treadmill cannot. Members learn that the balance is worth less than the effort that built it. They learn to spend quickly and to regard future promises as soft.

The vendor market reinforces the mechanism. The register profiles 87 vendors, of which 48 publish full or partial pricing. These vendors supply the machinery that manages and repeatedly adjusts loyalty economics. A business model built around frequent devaluation tools is not evidence of malice, but it shows demand. The register also holds 71 argued decisions on points and 305 glossary terms. That contested detail exists because the promises embedded in loyalty programmes are open to repeated reinterpretation. Devaluation is one of the main ways that reinterpretation reaches the member.

The strongest counter-argument

The strongest counter-argument is that devaluation is a pricing problem, not a trust problem. Loyalty liabilities are a balance sheet item that programmes must manage as costs change. Airlines face fuel and capacity shifts. Retailers face margin pressure. A member who keeps buying after a devaluation has shown that the programme still offers net value. Trust is not needed if both parties accept that earn and redeem rates are variable. In this view, the real failure is surprise, not devaluation. Publishing changes clearly solves the issue without stopping the treadmill.

What would change our mind

What would change our mind is observable member behaviour. We would need to see a programme that repeatedly devalues its core earn-to-redeem ratio while its active member balances and share of spend continue to rise across the same stable cohort after each change. We would also need absence of exit and absence of reduced tier enrolment. If repeated devaluations produced no measurable decline in these trust behaviours, then devaluation would be a pricing event and this position would be wrong.

What follows if we are right

If we are right, a programme operator should treat each devaluation as a withdrawal from a trust account, not a line item in liability management. Before changing earn or redeem rates, the operator should model lost future engagement alongside breakage. The change should be published with a clear reason and a visible next review date. For airlines and hotels, where all 61 and all 18 known programmes run tiers, the practical step is to let members lock a redemption price for a fixed period. That converts a threat into a guarantee. Operators who ignore this will find that members liquidate balances and spread their spend across programmes that promise less and keep more.