Retailers across North America are facing intensifying economic headwinds. In both Canada and the U.S, persistent inflation, elevated interest rates, fluctuating currency value, and shifting trade policies are straining consumer budgets and reshaping purchasing behaviours. These macroeconomic pressures extend beyond rising costs; they are also reshaping how customers engage with brands, how they shop, and how they interact with loyalty programs.

Customers are becoming more value conscious, trading down, deferring purchases, and evaluating the relevance and value of loyalty programs that they participate in. Retailers are confronting a critical question: how does one keep their loyalty program as a profitable growth lever when consumer behaviours and cost dynamics are evolving so rapidly?

The Loyalty P&L Under Pressure

At Bond, we’re seeing increased demand from retailers to strategically re-evaluate the financial fundamentals of their loyalty programs. To remain competitive and resilient, we recommend anchoring loyalty strategy around four core financial and behavioural focus areas:

1.    Customer Spending & Basket Composition

•    Are your customers migrating to lower cost categories, waiting to shop sales and discounts, or reducing purchase frequency?
•    What impact are your loyalty rewards and promotions having on retention, and are they influencing total basket size or frequency?
•    Are inflationary pressures eroding program engagement or accelerating point redemptions?

2.    Program Cost Structure & Funding Mix

•    Can your current earn/burn structure maintain profitability with rising cost of redemptions?
•    Is there opportunity to recalibrate tiers or bonus mechanics to manage point issuance and focus investments on most valuable members? 
•    How can you offset costs with internal partners, external partner funding, or vendor support?
•    How much fluctuation are you seeing your CPP (cost-per-point) and do you need to re-evaluate dividend rates or cost of redemptions for long-term profitability?  

3.    Scenario Planning & Tier Optimization

•     Are your tier levels still driving stretch behaviours to incent incremental value or does the structure need refinement?
•    What scenarios should be modeled to test breakage, engagement, and ROI across market conditions?
•    Are shifts into private label or substitution patterns in your product mix impacting perceived loyalty value?

4.    Non-Transactional Loyalty Levers

•    How can non-monetary, experiential, or localized benefits be expanded to deepen engagement?
•    Are there opportunities to differentiate through personalization, status extensions, or strategic partnerships?

Key Takeaways

•    Evaluate Loyalty Economics Regularly – Inflation, cost of borrowing, and shifts in consumer priorities all influence program costs, margins, and redemption trends.
•    Balance Value with Viability – Optimize rewards and promotions to ensure they drive engagement without compromising P&L integrity.
•    Stay Close to Customer Trends – Keep a close eye on basket trends, churn risk, and redemption patterns to adapt quickly. Proactive behavioural monitoring can inform rapid program pivots.
•    Innovate to Strengthen Retention – Lean into benefits that go beyond price. Convenience, personalization and relevance matter more than ever.

Let’s build Loyalty that performs—even in volatile markets.

Bond’s financial strategy solutions are designed to help you proactively steer your loyalty program toward both resilience and growth. Whether it’s building a business case for a new co-brand or paid tier, evaluating loyalty ROI, redesigning loyalty mechanics, or optimizing your program’s operation P&L, our experts help you stay one step ahead.

Reach out to discuss how we can help your brand thrive in today’s economic climate. 

Contact Michelle – Michelle.SequeiraYee@bondbl.com

Contact Bond – info@bondbl.com 

Our edition of The 2025 Bond Loyalty Report is now out! To download the free Executive Summary, click here.