All loyalty points systems such as Air Miles, Nectar Points etc. aim to persuade customers to remain loyal to a particular company. Customers of a particular company collect points, which they can exchange for discounts with the issuing company or its partners. Points can be in electronic or paper voucher form. These so-called private corporate currencies are mostly redeemed directly with the issuing company and cannot be transferred for use outside of that economic circuit. Companies gain valuable data about their customers and can decide which products are redeemable for points whilst minimizing the ‘opportunity costs’ of issuing points.

American Express Air Miles