The Future of Loyalty Programs: Why Gen Z Doesn’t Care About Cashback — And What They Want Instead?

The difference in behavior patterns across generations is a manifestation of many variables that influence the generation, from availability of goods, economic and living standards, education and availability and access of information to climate change. These are some of the key variables.

Anthropologists and sociologists have now clearly identified some key social strata and segments from baby boomers to Gen Z. From an economic standpoint, data indicates a clear upliftment across the world of living standards from shortages to surpluses.

According to the Deloitte 2025 Gen Z & Millennial Survey (based on ESG Today reporting), 65% of Gen Z and 63% of Millennials said they were concerned about the environment, and roughly 23% have already looked up a company's environmental credentials and policies before accepting a job offer.

However, 13% of Millennials and 15% of Gen Z say they have already changed professions due to environmental concerns. About 25% of respondents have looked into a company's environmental impact and policies before making a purchase, while 65% of Gen Z and 63% of Millennials indicate they are ready to pay more for environmentally sustainable products and services.

Consumption and consumerism took off, industrial activity boomed, infrastructure projects became bigger and bigger, leading to carbon emissions, plastic & chemicals consumption went through the roof.

All of this led to a significant destruction of natural habitats, increased health concerns, and climate change became noticeable and with natural calamities from earthquakes, floods, becoming larger and larger.

"Gen Z has the privilege of access to a lot more information resources and research to be able to understand the impact of this past behavior and consumption is one of the targeted behaviors," commented Brian Almeida, Founder of Points for Good.

Loyalty programs which originated as a tool to build relationships and loyalty with customers soon transcended into transaction led consumption boosters, buy more get more, so much so there was even a term coined for individuals who began to focus more on accumulating airline miles rather than the purpose of travel, known as 'the mileage run'.

As in the past, frequent flyer programs have been trendsetters for the loyalty industry and airlines have now begun offerings linked to carbon credits. Keeping with this trend brands now have offerings more aligned to sustainability and social causes.

"Most brands & loyalty programs have awoken to the fact of the need to align with Gen Z expectations of the brand and have begun offerings of using points to support social and sustainable causes, or alternatively offer higher point earnings for more eco-friendly products and services," said Brian Almeida, Founder of Points for Good.

Gen Z want to be able to use their points not only for consuming more of the same, but for meaningful redemptions that help causes such as planting a tree, plastic recycling, or personally satisfying causes like helping a child go to school, helping an elderly person's mobility, empowering youth through skilling, empowering young women, and helping a cancer patient and even a stray animal get access to treatment.

Brands are focused on aligning purpose with that of their customers in keeping with the trends of Gen Z. According to Jeff Fromm's Forbes analysis, over 70% of Gen Z consumers say they are more likely to trust a brand that shows real environmental impact rather than just promoting ESG slogans and nearly two-thirds of Gen Z are willing to pay a premium for sustainable products if the brand demonstrates genuine responsibility.

As per Brian Almeida, Founder of Points for Good, in India 'Points for Good' has enabled credit card programs and loyalty programs to allow their members to donate their reward points to over 40 projects from 18 social organisations.

Members of American Express, HDFC Bank, ICICI Bank, Axis Bank, SBI Cards, Standard Chartered Bank and a host of Indian banks can donate their reward points to organisations like Akanksha, Concern India, CRY, Bal Raksha, KSF, Agewell Foundation, World for All, and many more. Members have a choice to choose a social cause they are most passionate about to redeem their points.

Donating reward points to a social cause provides members a deep sense of connection with their brands through this common purpose of making our world a better place. It also provides an emotional connection and builds trust and relationship between brands and their customers creating a strong bond.

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