A construal level account of when consumers prefer to spend loyalty points over money

The central questions answered in this research are, “For what, and when, do consumers prefer to spend loyalty points over money?” We use construal level theory (CLT) to theorize that loyalty (or reward) points are perceived abstractly while money is perceived concretely, and this impacts spending preferences. We find that consumers prefer to spend loyalty points (vs. money) on high desirability‐low feasibility (vs. low desirability‐high feasibility) consumption items. The same pattern also persists when the items that vary on desirability and feasibility are equivalently priced. Second, we show that the construal‐level matching phenomenon influences temporal decisions such that consumers prefer to spend points (vs. money) for items that are available later (vs. now). Third, the moderating effect of category type (experiential vs. material) is reported. Finally, we demonstrate two managerial applications that are reported in the Web Appendix. We show that managers may influence how consumers spend loyalty points (a) by altering the concreteness of the decision context, and (b) by manipulating the nature of loyalty points.