Tier inflation is the default failure mode

The argument

Loyalty Register profiles 217 programmes, and tier status is known for 214. Of those, 112 run tiers. The sector distribution shows where the failure mode has already matured. Airlines run tiers in 61 of 61 programmes with known status. Hotels run tiers in 18 of 18. These sectors have had decades to add elite levels, invitation-only tiers, and unpublished benefits. Each addition demotes the tier below it. A card that once signalled the top becomes a mid-tier card when a higher tier appears. Members who already hold that card will not accept a loss of status, so the scheme must pad the new upper tier with rewards. Competitors then copy the extra tier. The result is a one-way ratchet.

Retail is the clearest mid-case. Retail profiles 49 programmes. Of the 46 retail programmes with known tier status, 25 run tiers. Some retail sectors have enough visit frequency and margin to support the ratchet, and those 25 have already entered it. Other sectors have not started, not because they are immune, but because their economics delay the first tier. Restaurants run tiers in only 2 of 22 known status programmes. Grocery runs none in 18, fuel none in 12, and banking only 1 in 14. A restaurant group with multiple locations and weekly visits could add a silver tier, then a gold tier, and the same demotion cycle would begin. The delay is not a permanent defence.

Telecom and coalition show the early stage. Telecom runs tiers in 2 of 7 known status programmes. Coalition runs tiers in 2 of 15. These small counts are not random noise. They are the first movers in each sector. Once one programme adds a second tier, all its rivals face a choice: match the tier or explain to their best customers why the competitor offers an upper level. Matching starts the ratchet. The register's count of 112 running tier programmes across all sectors is the accumulated result of that pressure.

The strongest counter-argument

The best case against this claim is that the register's own counts show tiers are far from universal. Only 112 of 214 programmes with known status run tiers. Many sectors have near-zero tier adoption. Grocery has 0 of 18, fuel has 0 of 12, and banking has 1 of 14. If tier inflation were the default failure mode, these sectors would have tiers by now, but they do not. Airlines and hotels are special because they sell perishable inventory and serve frequent business travellers with high lifetime value. A tier is a rational way to allocate scarce upgrades to the best customers, not an inflationary accident. Retail is mixed: 25 of 46 run tiers, which could simply reflect different margins and purchase frequencies. Restaurants at 2 of 22 show that most food loyalty works without any tier. The counter-argument holds that tiering is a deliberate choice under specific economic conditions, and the absence of tiers in grocery and fuel is a stable equilibrium, not a delayed failure. If that equilibrium persists across many re-profiles, the claim overstates the risk.

What would change our mind

If a future re-profile shows the number of programmes with known tier status rising above 214 while the number running tiers stays at or below 112, the default failure mode would be wrong. A second falsifier is a tiered programme that removes a tier and keeps it removed for two consecutive profiles without a regulatory change or a competitor exit. Either event would show that the ratchet can be reversed. The register would then need to rewrite this page.

What follows if we are right

A programme operator should treat every new tier as a demotion of the tier below, not as a pure addition. Before launching a tier, model the benefit cost of padding the new upper tier and the member backlash from demoting the old top tier. Write a rule that any new tier must retire an existing tier, so the total number of tiers never grows without a compensating cut. If your sector has no tiered programmes, such as grocery at 0 of 18 or fuel at 0 of 12, resist being the first mover. Once one competitor adds a tier, the ratchet begins. If your programme already runs tiers, the better move is to raise thresholds or deepen benefits within a tier, not to add another level. The 112 programmes already running tiers show how far the cycle has gone.