In part one of this series, we explored the scale of the in-store loyalty and gifting gap. This piece looks at why previous attempts to close it failed and what the industry got wrong.
The idea of redeeming loyalty points or gift cards in-store is not new. Retailers and programme operators have been attempting it for years. What is striking is not the ambition, it is how consistently those attempts have failed to scale beyond limited pilots and niche deployments.
New research from Weavr makes that failure impossible to ignore: only 42% of operators describe a fully consistent cross-channel experience today, and just 35% say customers find redemption seamless. Those numbers haven’t moved because the underlying problem was never properly fixed. Understanding why matters, because the same mistakes are easy to repeat.
Why did in-store loyalty redemption fail to scale?
The first generation of in-store loyalty and gifting solutions was built on a reasonable-sounding assumption: to enable redemption at the till, you integrate with the till. In practice, this means navigating hundreds of different point-of-sale systems across retail estates, each with its own integration requirements, its own approach to split-tender transactions, and its own timeline for deployment.
A single retailer integration could take months. Building a network of meaningful scale, enough to make a programme genuinely useful to consumers, required repeating that process across dozens or hundreds of retail partners. The unit economics are almost always unworkable, and the coverage almost always too thin to matter.
Besides, consumer expectations and behaviour at the physical point-of-sale have changed beyond what those implementations were solving for.
What is the operational impact of in-store loyalty redemption on staff?
Even where integrations are completed, a second problem emerges: the operational burden on retail staff. In-store redemption, particularly split-tender transactions and manual voucher handling, introduce complexity at the exact moment when checkout speed is most critical.
The scale of that burden is evident. 94% of programme operators report a moderate to significant ongoing burden on store staff from their redemption process. 53% of in-store redemption failures are caused by staff error or confusion when handling split transactions or refunds. These are not edge cases, they are systemic, and they are a direct legacy of building redemption on top of checkout infrastructure that was never designed for it.
How the industry adapted, badly
Faced with a scaling problem that integration-led approaches could not solve, most programmes settle on a different answer: they stop trying to fix in-store redemption and start treating its failure as an acceptable outcome. Rather than solving the in-store gap, many programmes quietly absorb it into their financial model, making breakage – the funds left on a gift card or points programme at expiry – a feature rather than a problem to fix. Ask any major retailer the value of breakage and it often runs into high single-digit and often double-digit percentages.
This is not a strategy for driving much-needed customer engagement in physical retail. It is a symptom of an industry that ran into a hard infrastructure problem, could not solve it economically, and ultimately decided to live with the failure instead. The result is a ceiling on programme growth that has been in place for years and a consumer experience that reflects it.
What needs to change for in-store loyalty redemption to work?
The result is a market where 51% of operators describe redemption as functional but forgettable and only 35% as seamless, not because the goal was wrong, but because the infrastructure approach made it impossible to achieve. The question is whether the industry is ready to approach the problem differently this time.
It turns out that the evolution in consumer payment methods and behaviour offers a truly radical alternative to the status quo, and cuts through the barriers that have plagued implementation in the past. The core mistake was not technical, it was conceptual. The power of mobile wallet – personal, data rich and connected – means that in-store loyalty and gifting redemption no longer needs to involve integration with the retailer’s PoS system. This, however, is the subject of our next blog. In the meantime, you can explore the full findings and download the research here.
Sources
Research conducted by Weavr in partnership with Censuswide, [April, 2026]. Based on responses from 500 UK retail sector decision makers and evaluators.
