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JOURNAL OF MARKETING DEVELOPMENT AND COMPETITIVENESS

The Factors Affecting the Redemption of Credit Card Reward Points in Indonesia

Author(s): Sulistyawati Toelle

Citation: Sulistyawati Toelle, (2011) "The Factors Affecting the Redemption of Credit Card Reward Points in Indonesia" Vol. 5, Iss. 5, pp. 110 - 120

Article Type: Research paper

Publisher: North American Business Press

Abstract:

Reward point is a form of customer loyalty program used by many credit card issuers in many countries,

including Indonesia. This paper presents the result of a descriptive study that was conducted in an

attempt to assess the Indonesian credit cards users’ level of awareness about the reward-point programs,

and identify the factors affecting the redemption of reward points. The respondents of the study are the

credit card users in two major cities in Indonesia in 2009. Snowball sampling technique is used to collect

data from the users using questionnaire as a measurement tool. Of the 500 questionnaires distributed for

this study, 276 usable questionnaires were returned giving a response rate of 55%, which was considered

satisfactory for subsequent analysis. The Chi-Square and logit regression analysis are used to analyze the

data. Results show that 82.20% of the sample reported being either completely or partially aware of their

credit cards’ point-reward program. Regarding the factors affecting the redemption of reward points, the

study found that redemption rate is related to the awareness about reward point program, duration of

credit card usage, average usage of credit cards, and the customers’ attitude toward incentives of reward

point program.