# How to build CSR image with mixed-reward loyalty programs

Aida Mimouni-Chaabane, Béatrice Parguel

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Aida Mimouni-Chaabane, Béatrice Parguel. How to build CSR image with mixed-reward loyalty programs. Journal of retailing and consumer services, 2025, 87, pp.104413. 10.1016/j.jretconser.2025.104413. halshs-05511123

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# How to build CSR image with mixed-reward loyalty programs

Aida Mimouni-Chaabane<sup>a ID</sup>, Béatrice Parguel<sup>b, * ID</sup>

## ARTICLE INFO

### Keywords:

- Loyalty programs

- Mixed rewards

- CSR image

- Prosocial redemption

- Warm glow

## ABSTRACT

Spurred by growing consumer demand for sustainability, many loyalty programs (LPs) offer mixed rewards consisting of self-benefiting and charity-benefiting options. Taking a social perspective, this article examines how the design of mixed-reward LPs helps to reinforce Corporate Social Responsibility (CSR) image. Results from two experiments show that mixed-reward LPs can improve a firm's CSR image as well as customer loyalty, and the importance of giving customers options. Specifically, compared to a self-benefiting reward LP, a mixed-reward LP improves CSR image, but only when customers can choose the recipient charity. Allowing customers to split their donation between multiple charities further improves CSR image through the mediating effects of LP usage (i.e., prosocial redemption) and a social benefit for the customer (i.e., warm glow). These findings suggest that LPs can be relevant drivers for doing good and offer an additional, socially-based logic to rethink their role and design.

## 1. Introduction

Investment in loyalty programs (LPs) continues to proliferate, and is forecast to reach $24.44 billion by 2029 (Fortune Business Insight 2022). Although the primary objective of these programs is to increase overall business performance by fostering customer loyalty (Lin and Bowman, 2022; Meyer-Waarden et al., 2023; Nesset et al., 2021), more and more LPs are simultaneously offering self-benefiting and charity-benefiting reward options, suggesting that firms are now extending LPs' reach to answer the growing consumer demand for Corporate Social Responsibility (CSR; Kumar 2020; Stourm et al., 2020). Such LPs, tangible and monetary in nature, are considered attractive by 40 % of LP members (and 65 % in Gen Z) (The Point of Loyalty, 2022), which explains their rapid expansion in the airline industry (e.g., American Airlines, Air France-KLM, Etihad), the credit card industry (e.g., Chase, Citi, American Express), the hotel industry (e.g., Marriott, Hilton, Accor), and the retail industry (e.g., Kroger, Sephora, Gap).

In line with Giebelhausen et al. (2016), we call this form of LPs “mixed-reward LPs”, as they give customers the choice of using their loyalty points for themselves or donating them to a partner charity supporting a social or environmental cause. For instance, members of Club Mango likes you, the LP of the Spanish fashion company Mango, can redeem 200 Likes (i.e. LP points) for a discount of €1, or donate their Likes to different charities in increments of 50, 200, 400, or 1000 Likes.

As this example illustrates, mixed-reward LPs set the options, but the customer chooses which option to activate. Observation of real-world practices shows that mixed-reward LPs can provide other options too, for example letting members choose the recipient charity (instead of having a predetermined beneficiary charity), and allowing them to split their donation between multiple charities (instead of giving to just one).

Despite their popularity, very little is known about the outcomes of mixed-reward LPs for the customer and the firm. The only study that exists focuses on recycling, i.e. not an actual LP-related setting, and has limited the investigation of mixed rewards to customer-centric measures of satisfaction (e.g., Giebelhausen et al., 2016). However, this measure is insufficient to assess the potential for mixed-reward LPs to embrace a social perspective (Kumar 2020), or to consider the breadth of roles and impacts that marketing practices can have (Chandy et al., 2021; Madan et al., 2023). Firms are increasingly being encouraged to view their LPs as a means of aligning their customers with their brand's mission (Stemless, 2022), making brand image a relevant outcome of mixed-reward LPs. Furthermore, previous research does not take into account the influence of the available options on mixed-reward LPs' outcomes (Eason et al., 2015; Hwang and Choi, 2020). Yet choice is a critical feature that deserves further investigation, as it can have both positive (Robinson et al., 2012) and negative (Ein-Gar et al., 2021) effects on prosocial behavior.

To fill these gaps, the present research takes a social perspective to

<footnote><sup>a</sup> CY Cergy Paris Université, Thema, France</footnote>

<footnote><sup>b</sup> CNRS, Université Paris-Dauphine, PSL Research University, DRM, France</footnote>

<footnote>* Corresponding author.</footnote>

<footnote>E-mail addresses: aida.mimouni@cyu.fr (A. Mimouni-Chaabane), Beatrice.parguel@dauphine.psl.eu (B. Parguel).</footnote>
examine how the design of mixed-reward LPs can strengthen firms' CSR image. Results from two experiments show that mixed-reward LPs can improve CSR image as well as customer loyalty, and the importance of customer choice. Mere exposure to a mixed-reward LP (vs. a traditional self-benefiting LP) improves CSR image, but only when the LP allows customers to choose the recipient charity (vs. a charity predetermined by the firm). This positive effect does not come at the expense of loyalty, as mixed-reward LPs where customers can choose the recipient charity are also associated with higher levels of loyalty than traditional LPs. Moreover, a mixed-reward LP that allows customers to split their donation between several charities, instead of giving it to only one, also improves CSR image through the mediating effects of prosocial redemption, i.e., the decision to donate one's loyalty points to the charity, and the "warm glow", i.e., the positive emotion derived from behaving altruistically (Andreoni, 1989).

This research makes three important contributions to the literature. First, for many years, the extant LP literature predominantly focused on self-benefiting rewards (Meyer-Waarden et al., 2023; Zou et al., 2022) and used transaction-based and exchange-based frameworks (Chen et al., 2021) to examine their attitudinal, behavioral, and financial effectiveness (Agarwal et al., 2022; Lin & Bowan 2022; Nesset et al., 2021). We enrich this perspective by focusing on rewards that are other-benefiting, and offer a broader, more socially-focused theoretical approach interested in LPs' power to produce positive social outcomes, for both customers (prosocial redemption and warm glow) and firms (CSR image). Therefore, this research not only provides what to the best of our knowledge is the first response to calls for a redesign of LPs in the CSR era (Kumar 2020; Stourm et al., 2020), it also sheds light on how to expand the role of LPs in signaling a firm's commitment to CSR and addressing the challenges of today's societies (Chandy et al., 2021; Madan et al., 2023). Furthermore, it contributes to the charitable giving literature, by showing that mixed-reward LPs are a relevant new form of individual indirect giving, in addition to more traditional forms of firms' direct giving (Langan & Kumar 2019) and firms' indirect giving such as cause-related marketing (Jublee et al., 2023) and "round-ups" (Kelting et al., 2019). Second, we add to the nascent body of research on charity-benefiting rewards in LPs (Eason et al., 2015; Hwang and Choi, 2020). Previous studies have been inconclusive on the relative effectiveness of charity-benefiting and self-benefiting rewards. By studying design options for a mixed-reward LP, we show that this type of LP can be effective and that offering multiple options is essential to ensure a positive customer response. Third, we shed light on the underlying mechanisms that mediate the effect of mixed-reward LPs on CSR image. There are two of them: a commitment-based mechanism (prosocial redemption) and a psychologically-based mechanism (warm glow). From a managerial perspective, our findings provide practical recommendations on how to rethink the role and design of LPs.

## 2. Theoretical background and hypotheses

### 2.1. Mixed rewards: an original combination of self- and other-benefiting rewards

The type and nature of rewards is a key component of LPs' success, as they drive program and firm engagement (Meyer-Waarden et al., 2023), customers' participation behavior (Hu et al., 2022), loyalty intentions (Zou et al., 2022), and happiness (Agarwal et al., 2022). Previous research has so far extensively investigated rewards that are self-benefiting, i.e., benefit the customer themself. For example, tangible rewards such as discounts and gifts foster behavioral loyalty and customer satisfaction (Chen et al., 2021). Intangible rewards, which encompass notions of higher social status (Hu et al., 2022) and personalized experiences (Steinhoff and Zondag, 2021), induce feelings of gratitude (Steinhoff and Palmatier, 2016) and positive affect (Agarwal et al., 2022), and enhance commitment to the firm (Meyer-Waarden et al., 2023).

As consumer demand for sustainability has increased, LP rewards have expanded to include other-benefiting rewards. This new type of reward has an altruistic and prosocial orientation, and benefits a person or entity other than the customer themself, such as a charity (Eason et al., 2015; Hwang and Choi, 2020). A very limited number of studies examine the relative effectiveness of self-benefiting vs. charity-benefiting rewards. Their results are contradictory. While Eason et al. (2015) show that charity-benefiting rewards might outperform self-benefiting rewards in terms of increasing future purchase intentions in a sample of students, Hwang and Choi (2020) find that self-benefiting rewards have a greater impact on LP participation than charity-benefiting rewards of the same amount. Mixed rewards go further, offering both self-benefiting and other-benefiting rewards simultaneously, but that approach has never been investigated in the specific case of LPs, so we know little about the effects of mixed-reward LPs.

To the best of our knowledge, the only research that has investigated mixed rewards concerns participation in recycling as a voluntary green initiative, i.e., not an actual LP-related setting. In the study concerned, Giebelhausen et al. (2016) show that offering participants a charity-benefiting reward (as opposed to no reward) increases warm glow and satisfaction with the service experience for consumers who choose to participate in the initiative, but diminishes those effects for consumers who choose not to participate. A mixed-reward design, in contrast, because it helps maintain consumers' positive self-image, maximizes satisfaction for both groups. Though this study confirms the added-value of mixed rewards, it offers no guidance on how they should be designed and implemented, nor does it consider the benefits of offering mixed rewards for the firm.

The research presented here studies mixed rewards in the specific context of LPs. In line with the dominant approach in the LP literature (e. g., Belli et al. 2022; Chen et al., 2021; Kim et al., 2021), we investigate how the design of such mixed rewards influences their effectiveness for both the customer and the firm. Based on observation of real-life practices, we focus on two designs: one allowing customers to choose the recipient charity (predetermined vs. chosen by the customer) and one allowing customers to split their donation between multiple charities (split. vs. no-split). Moreover, we extend the role of LPs beyond the dominant logic of behavioral and attitudinal loyalty by embracing a more social perspective that considers them as a new form of CSR initiative.

### 2.2. CSR image enhancement as a relevant outcome assigned to mixed-reward LPs

CSR encompasses firms' voluntary measures to integrate social and environmental concerns into their interaction with stakeholders (Bhattacharya and Sen, 2004). This can involve different forms of initiatives and activities, including environmentally-friendly policies and community support (Ailawadi et al., 2014; Liu and Mattila, 2016), ethical conduct and consumer rights protection (Lee et al., 2019), direct corporate donations (e.g., Langan & Kumar 2019) and indirect donations through cause-related marketing activities (e.g., Jublee et al., 2023; Kuo et al., 2022), "checkout charity" and round-ups (Han, 2022; Kelting et al., 2019). In the specific case of loyalty programs, CSR initiatives are carried through the reward collection and redemption systems: the number of points collected is subject to the adoption of green behaviors by consumers such as reusing towels during a stay at a hotel or buying green products (Flacandji et al., 2023; Liu and Mattila, 2016) and/or loyalty points can be redeemed into a donation to a charity (Eason et al., 2015; Hwang and Choi, 2020). Investing in these various CSR activities has gained strategic importance because it is associated with a positive perception of the company's value, which affects its reputation and image as well as its brand equity (Gupta & Pirsh 2008; Kim et al., 2023; Lee et al., 2019). CSR also builds positive attitudes and evaluations in customers (Ailawadi et al., 2014; Chen and Huang, 2018;
Min et al., 2023). For example, CSR perceptions can spill over to the perceived innovativeness of product attributes (Chen and Huang, 2018). CSR ultimately strengthens customer-brand relationships (Ailawadi et al., 2014; Min et al., 2023).

Previous research has demonstrated a positive relationship between CSR initiatives and customer loyalty (Ailawadi et al., 2014; Cha et al. 2014; Du et al., 2007; Lee et al., 2019; Louis et al., 2019; Lu et al., 2020). Ailawadi et al. (2014), for instance, show that CSR activities of environmentally-friendly measures, community support, selling locally produced products, and treating employees fairly have a positive effect on share of wallet (a measure of customer behavioral loyalty). Du et al. (2007) find that a firm CSR positioning is associated with greater purchase likelihood, higher level of long-term loyalty and more advocacy behaviors. The positive effect of CSR on customer loyalty can be direct or indirect, operating through a myriad of psychological, attitudinal and cognitive variables (Ailawadi et al., 2014; Cha et al., 2016; Louis et al., 2019). For instance, Louis et al. (2019) show that the retailer's engagement in philanthropic activities has a significant and positive influence on consumers' trust in this retailer which in turn has a positive effect on the perceived equity of the brand and ultimately on loyalty toward the retailer. The positive effect of CSR on customer loyalty is also more positive for initiatives that are aligned with the brand image (Cha et al., 2016).

A mixed-reward LP that carries a charity-benefiting option, unlike a traditional exclusively self-benefiting reward LP, signals that a firm is committed to helping a cause and cares about society and the environment. It thus extends the program's role from merely nurturing customer loyalty to building CSR image, defined as consumers' perceptions of the firm's commitment to CSR principles (Pomering and Johnson, 2009). This extension of the LP's role and objectives is in line with recent, growing calls to investigate the societal contributions of marketing in general (Chandy et al., 2021; Madan et al., 2023) and LPs in particular (Kumar 2020; Stourm et al., 2020).

## 2.3. Effect of choice of the recipient charity on CSR image

We argue that the positive influence of exposure to a mixed-reward LP (vs. a self-benefiting reward LP) on the firm's CSR image is stronger when the firm lets its LP members choose the recipient charity, rather than determining it in advance. To give its customers the option of choosing the recipient charity, a firm must be engaged in supporting a variety of causes, partner with more charities, and allocate more resources to managing its LP. These extra efforts reflect the firm's level of commitment and its ambition to do good, and thus indicate intrinsic motives according to attribution theory (Weiner, 1979), as well as a genuine social conscience. As Parguel et al. (2011, p.19) write, "Everything else being equal, the company's motive to engage in good practices should be perceived as more intrinsic when its efforts appear strong rather than weak." Because perceived intrinsic motives are likely to transfer to corporate brand evaluations (Parguel et al., 2011), we hypothesize the following.

**H1.** Exposure to a mixed-reward (vs. a self-benefiting reward) LP enhances the firm's CSR image more when customers can choose the recipient charity than when the charity is predetermined by the firm.

## 2.4. Effect of a split-donation option on CSR image

We expect firms offering mixed-reward LPs to garner higher levels of corporate brand evaluations if they engage their customers in the program and encourage them to use their loyalty points to benefit a charity. One way to achieve this goal is to allow them to split their donation between multiple charities, rather than forcing them to give all their points to a single charity. Ein-Gar et al. (2021) found that asking potential donors to choose one of two deserving charities -a condition close to a no-split option since the donation goes to only one charity-

lowers the total amount of donations, because customers' desire to help a good cause may conflict with their desire to be fair to all possible recipients, so they make no choice (and no donation). In contrast, a split-donation option, because it allows LP members to help multiple charities equally, could mitigate any perception of unfairness and encourage prosocial redemption. Furthermore, allowing customers to split their donation between multiple charities could foster deeper engagement with the giving process and increase customers' perceived control and active role in supporting causes they believe in (Bendapudi and Leone, 2003; Robinson et al., 2012; Tao et al., 2018). This brings us to our second hypothesis.

**H2.** In a mixed-reward LP where customers can choose the recipient charity, prosocial redemption is higher when customers can split their donation between multiple charities than when they can only donate to one charity.

Charitable giving is associated with positive moral emotions in consumers (Paramita et al. 2020), with warm glow playing a central role (Giebelhausen et al., 2016; Girardin et al., 2021). Warm glow is a positive feeling, a sense of pride, joy, and satisfaction that people experience when helping others (Andreoni, 1989). This psychological benefit motivates individuals to do a good deed (Girardin et al., 2021) but it also brings them pleasure, experienced when they behave altruistically and prioritize social well-being over pleasing themselves (Chang and Chu, 2020; Giebelhausen et al., 2016; Imas, 2014). In addition, warm glow has multiple outcomes. It fosters self-indulgent behavior (Chang and Chu, 2020), it increases satisfaction (Giebelhausen et al., 2016) and customer participation and altruistic behavior (Girardin et al., 2021). Extending these conclusions, we consider that warm glow may also improve corporate brand perceptions, in line with Drengner et al.'s (2008) finding regarding the effect on brand image of positive emotions experienced during a marketing event. It is very possible that customers who feel a warm glow will look for the cause of that positive emotion, and attribute it to the brand in general and its commitment to doing good in particular. The warm glow customers derive from a firm's CSR initiatives may therefore increase customers' attention to the brand's societal commitments, and transfer them to the firm's CSR image. Formally expressed.

**H3.** Prosocial redemption fosters warm glow which enhances the firm's CSR image.

Fig. 1 depicts our conceptual model and the associated empirical studies.

In sum, our conceptual model follows Kumar's (2020) general framework for cause-related marketing loyalty. It posits that the reward option design in a mixed-reward LP (i.e., choice of recipient (self or other), choice of recipient charity, and option of splitting the donation) conditions LP usage (i.e., prosocial redemption), which in turn leads to positive social outcomes for both the customer (i.e., warm glow) and the firm (i.e., enhanced CSR image). We test our model with two experiments. In the first experiment, we compare a traditional self-benefiting LP to a mixed-reward LP and test the impact of the choice of recipient charity on CSR image (H1). As a control, we also measure customer loyalty and check that the hypothesized effect of this mixed-reward LP design does not diminish members' loyalty. In the second experiment, we consider a mixed-reward LP that allows the customer to choose the recipient charity, and further investigate the direct influence of having the option to split the donation between several charities on prosocial redemption (H2) and the mediating role of warm glow on the relationship between prosocial redemption and CSR image (H3).

Both studies are between-subjects experiments, conducted in a ready-to-wear clothing setting. The clothing industry is relevant to both male and female participants. Participation in a clothing LP does not require any particular purchase profile or cognitive skills, unlike industries such as airlines or banking. In addition, several real-life clothing retailers use mixed-reward LPs (e.g., Gap, Mango, Etam), and that
<figure><img src="image_2.png" /><figcaption>Fig. 1. Conceptual model and empirical studies.</figcaption></figure>

should increase the realism of the manipulations. We used a fictitious brand, Grigio, described as a brand of women's, men's, and children's clothing, shoes, and accessories. The studies' population consisted of French adult consumers aged 20 and above who are members of at least one LP. Each sample was randomly recruited from paid panels. To ensure that the studies' sample sizes were sufficient for analysis, we performed a power analysis, using G*Power (Faul et al., 2009). All experimental samples were larger than the size required to achieve a power of 80% and 5% significance (two-sided), for detecting a medium effect size, i.e., Cohen d = .50 (Dhand and Khatkar, 2014).

# 3. Study 1: choice of the recipient charity in a mixed-reward LP

## 3.1. Stimuli

Study 1 is a single factor experiment that manipulates the charity that benefits from the donation: no charity in the case of a traditional self-benefiting LP, a charity predetermined by the firm, or a charity chosen by the member in a mixed-reward LP. A flyer describes Grigio's LP. Membership is free. Members collect points based on the amount spent (€1 = 1 point). In both conditions, the rewards consist of an €8 voucher for every 150 points collected, and in line with real-life LPs, they include free alterations and advance news of collections during the year.

In the self-benefiting reward condition, the voucher is for personal purchases only. In the mixed-reward LP with predetermined beneficiary condition, respondents can choose to use the voucher for themselves or to donate to a charity selected by the firm, namely the Red Cross, a well-known and well-liked charity. In the mixed-reward LP with choice of the recipient charity condition, respondents can choose to use the voucher for themselves or to donate to a charity of their choice from a list of six well-known charities supporting a variety of causes (i.e., health, education, food poverty, women and children who are victims of abuse, and the environment), as inspired by real-life practices.

A pre-test study of the three conditions was conducted among 64 French adult consumers (52% women, mean age = 43 years) recruited randomly by Panelabs, a paid panel research institute. Respondents were exposed to each condition and had to associate each flyer to the right redemption option. A chi-square test showed that respondents correctly associated the first condition with a self-benefiting reward, the second condition with the choice of self-benefiting or charity-benefiting reward imposed by the firm, and the third condition with the choice of self-benefiting or charity-benefiting reward chosen by the customer ($\chi^2(4) = 225.69, p < .001$). In addition, the three conditions obtained ratings

higher than 4.3 (out of 5) in terms of perceived credibility and ease of understanding, and displayed no significant differences on these two variables (respectively $F_{(2,62)} = 1.917, p = .156$ and $F_{(2,62)} = .122, p = .885$).

## 3.2. Procedure

Respondents, recruited from the online Qualtrics panel platform, were first asked to provide information about their real-life LP memberships. They then had to imagine that they were customers of Grigio who like the brand and its products and are members of its LP. They were randomly assigned to one of the three conditions (self-benefiting vs. mixed-predetermined vs. mixed-choice) and asked to answer questions about their loyalty, Grigio's CSR image, monthly spending on clothes, and involvement in the product category.

We measured loyalty using three items from Mimouni Chaabane and Volle (2010): “I really like Grigio’s program”, “I would use Grigio’s program” and “I would recommend Grigio’s program to my friends and family”. CSR image was measured using three items from Parguel et al. (2011): “The brand Grigio seems to ... follow ethical principles/respect moral principles/respect the environment”. Monthly spending on clothes was measured using a single item asking respondents to indicate their spending bracket. Involvement in the product category was measured using a three-item scale adapted from Dubois and Laurent (1994): “I'm very interested in the ready-to-wear industry”, “I like buying ready-to-wear products”, and “I could talk about clothes for hours”. The questionnaire ended with a manipulation check (“The Grigio loyalty program allows me to donate to a charity of my choice”) and the respondent's socio-demographics. With the exception of loyalty, measured on an NPS-type scale of 0–10, all questions used 7-point Likert scales to assess the focal constructs.

To make sure the indicators for each construct measure what they are intended to measure, tests for convergent and discriminant validity were conducted for both research studies (Table 1). Construct reliability was tested by looking at the indicator loadings: all were significant and above the recommended threshold of .708 (Hair et al., 2022). Moreover, the squared value of the indicator loadings always exceeded .5, confirming indicator reliability. Internal consistency reliability was assessed using Jöreskog's composite reliability (CR) and convergent validity using the average variance extracted (AVE). As displayed in Table 1, all the estimated indices were above the threshold of .6 for CR and .5 for AVE (Bagozzi and Yi, 1988). Finally, we tested the discriminant validity of the construct items by looking at the cross-loadings, and found that all PLS item-to-construct loadings were greater than the cross-loadings
<table><caption>**Table 1**

Descriptive statistics, reliability, and validity (study 1 and study 2).</caption><thead><tr><th></th><th>M</th><th>SD</th><th>CR</th><th>AVE</th><th>1</th><th>2</th><th>3</th></tr></thead><tbody><tr><td><strong>Study 1</strong></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>1 Loyalty</td><td>5.74</td><td>2.22</td><td>.92</td><td>.79</td><td>1</td><td></td><td></td></tr><tr><td>2 CSR image</td><td>4.30</td><td>1.12</td><td>.91</td><td>.78</td><td>.23*</td><td>1</td><td></td></tr><tr><td>3 Involvement in the product category</td><td>5.07</td><td>1.34</td><td>.92</td><td>.79</td><td>.02</td><td>.28*</td><td>1</td></tr><tr><td><strong>Study 2</strong></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>1 CSR image</td><td>4.68</td><td>1.31</td><td>.94</td><td>.81</td><td>1</td><td></td><td></td></tr><tr><td>2 Warm glow</td><td>4.60</td><td>1.74</td><td>.97</td><td>.93</td><td>.49*</td><td>1</td><td></td></tr><tr><td>3 Involvement in the product category</td><td>4.27</td><td>1.71</td><td>.94</td><td>.85</td><td>.38*</td><td>.17</td><td>1</td></tr><tr><td>4 Altruism</td><td>4.61</td><td>1.28</td><td>.89</td><td>.67</td><td>.35*</td><td>.57*</td><td>.06</td><td>1</td></tr></tbody></table>

(Gefen and Straub, 2005), and each correlation was lower than the square root of the AVEs of the two correlated variables (Fornell and Larcker, 1981). These tests confirmed discriminant validity for the sample (Table 1).

### 3.3. Participants

The sample consisted of 184 adult consumers (67 % women, mean age = 33). Respondents were enrolled in an average of 3.9 LPs. They varied in terms of their monthly spend on clothes ([€50 or less] = 36.4 %, [€51, €100] = 43.5 %, [€101, €200] = 16.4 %, [€201 and more] = 3.8 %). They associated the ability to choose the charity for the donation more significantly with the mixed-choice option condition than the mixed-predetermined one ($M_{Choice}$ = 5.55, SD = 1.51; $M_{Predetermined}$ = 2.31, SD = 1.53; $t_{(127)}$ = -12.09, $p < .001$), suggesting successful manipulation. Participants did not differ in terms of gender ($\chi^2$ = 4.2, $p = .11$), age ($F_{(2,181)}$ = .84, $p = .43$) or monthly spend on clothes ($F_{(2,181)}$ = .90, $p = .40$) across the experimental conditions.

### 3.4. Results

To test H1, we conducted a univariate analysis of variance with CSR image as the dependent variable, the reward type (no charity vs. charity predetermined by the firm vs. charity chosen by the LP member) as the independent variable, and the number of LPs and involvement in the product category as covariates. The results revealed that reward type has a significant effect on CSR image ($F_{(2,179)}$ = 14.04, $p < .001$). Follow-up contrasts showed that the mixed-reward choice condition ($M_{Mixed-choice}$ = 4.71, SD = 1.12) produces higher CSR image than the self-benefiting reward condition ($M_{Self-benefiting}$ = 3.78, SD = 1.09; $F_{(1,179)}$ = 27.81, $p < .001$) and the mixed-reward predetermined condition ($M_{Mixed-predetermined}$ = 4.34, SD = 1.01; $F_{(1,179)}$ = 4.47, $p < .05$). Moreover, the mixed-reward predetermined condition produces higher CSR image than the self-benefiting reward condition ($F_{(1,179)}$ = 10.76, $p < .001$). These results support H1.

We also conducted a univariate analysis of variance with loyalty as the dependent variable, using the same independent variable and covariates. The results revealed that reward type has a significant effect on loyalty ($F_{(2,179)}$ = 4.31, $p < .01$). Follow-up contrasts showed that the mixed-reward choice condition ($M_{Mixed-choice}$ = 6.61, SD = 2.13) produces higher loyalty than the self-benefiting reward condition ($M_{Self-benefiting}$ = 5.49, SD = 2.34; $F_{(1,179)}$ = 8.62, $p < .01$). No difference was found between the mixed reward-predetermined condition ($M_{Self-benefiting}$ = 6.13, SD = 2.01) and the two other conditions respectively.

### 3.5. Discussion

The results provide empirical evidence of the relevance of LPs as a CSR tool that can signal a firm's commitment to charitable giving, and thus improve its image. This positive effect occurs after mere exposure to a mixed-reward LP. More importantly, we show that one of the levers of this effect is allowing customers to donate to the charity of their choice, rather than to a charity predetermined by the firm. In addition, unlike previous studies that question the impact of charity-benefiting rewards on loyalty intentions (i.e., Eason et al., 2015; Hwang and Choi, 2020), our results indicate that such rewards, when combined with more traditional self-benefiting rewards, have a positive effect on loyalty. We explore this further in Study 2 by testing the effect of participation in (not mere exposure to) the LP on prosocial redemption, warm glow, and CSR image.

## 4. Study 2: split-donation option in a mixed-reward LP

### 4.1. Stimuli

Study 2 is a single factor between-subjects experiment manipulating the possibility of splitting the donation (split vs. no-split). As in Study 1, we used the scenario method to help respondents project themselves into the manipulated conditions. A flyer (see Appendix 1) describes a LP that awards a €5 voucher for every 250 points accumulated. The participants were told that they have two vouchers. In the no-split condition, respondents can use the vouchers for themselves, or donate them to a single charity of their choice from a list of six charities. In the split condition, respondents are allowed to use the vouchers for themselves, or for a donation split between one or more charities chosen from the same list of six charities.

A pre-test study of the two conditions (split vs. no-split) was conducted among 64 French adult consumers (52 % women, mean age = 43 years) recruited randomly by Panelabs. A chi-square test showed that respondents correctly associated the first condition with a split-option between the six charities and the second condition with a no-split option ($\chi^2$ = 15.14, $p < .001$). In addition, the two conditions obtained ratings higher than 4.1 (out of 5) in terms of perceived credibility and ease of understanding, and displayed no significant differences on these two variables (respectively $F_{(1,63)}$ = .28, $p = .867$ and $F_{(1,63)}$ = .612, $p = .437$).

### 4.2. Procedure

Respondents recruited from the online panel of a marketing research institute (Panelabs) were asked to provide information about their LP membership. They then had to imagine that they were customers of the brand Grigio and members of its LP. After being randomly assigned to one of the two experimental conditions, they were asked the following question: "Thanks to your participation in Grigio's loyalty program, you have collected 500 loyalty points. You now have to decide on how to use them." In the no-split condition, respondents were invited to choose between the two following options: "Convert my 500 points into vouchers to be used on my next purchase" or "Donate my 500 points to ONE of the LP's partner charities, to be chosen by myself." If respondents chose the second option, they were asked to decide which of the firm's six partner charities would receive the donation. In the split condition, respondents were invited to choose between the two following options: "Convert my 500 points into vouchers to be used on my next purchase" or "Donate my 500 points to ONE OR MORE of the LP's partner charities, to be chosen by myself". If respondents chose the second option, they were asked to decide which charity(ies) would receive the donation. Prosocial redemption was coded 0 if the respondent used the points for themselves and 1 if they donated their points to charity.

In the rest of the questionnaire, respondents in both conditions had to answer questions about Grigio's CSR image and their warm glow

<footnote>* significant correlations ($p < .05$).</footnote>
feeling. CSR image was measured by four items adapted from Pérez and Rodríguez del Bosque (2013): “Grigio helps solve social problems”, “Grigio plays a role in the society beyond the generation of economic benefits”, “Grigio is concerned with improving the general well-being of society”, and “Grigio is concerned with respecting and protecting the natural environment”. The use of a new measure for CSR image allows us to replicate the results from Study 1 with a more concrete measure. The measure adapted from Pérez and Rodríguez del Bosque (2013) focuses on the social, environmental, and economic dimensions of CSR while the measure from Parguel et al. (2011) focuses on the more abstract dimensions of moral and ethical values. The measure for warm glow was adapted from Mimouni Chaabane and Parguel (2016): “With Grigio’s loyalty program, I’m happy to be able to donate my points to a charity (charities)”, “... I feel personal satisfaction at the idea of supporting a charity (charities)”, “... I feel good about helping a charity (charities)”. We also measured altruism using a four-item scale (“I am altruistic”, “I like giving to others”, “I’m willing to sacrifice my goals to help others”, “I am selfless in giving time to others”) borrowed from Mowen and Sujan (2005), to be used as a covariate along with involvement in the product category (measured as in Study 1). Finally, we measured perceived program credibility (“Would you say that Grigio’s LP is credible/not credible?”) and past respondents’ donation behavior (“Did you make a donation to a charity during the last 12 months?”) using single-item scales. All questions used 7-point Likert scales to assess the focal constructs. Table 1 provides the detailed measurement results.

## 4.3. Participants

The sample consisted of 104 adult consumers (51.9 % women; mean age = 38 years). Respondents varied in terms of their LP membership ([1, 5] = 36.5 %, [6, 10] = 32.7 %, [11, 15] = 14.4 %, [more than 15] = 16.3 %) and in terms of their monthly spending on clothes ([less than €50] = 50 %, [€51, €100] = 34.6 %, [€101, €200] = 10.6 %, [more than €200] = 4.8 %). Most respondents (59.6 %) had not made a donation to a charity during the previous 12 months. The LP was perceived as credible (mean = 4.94), with no significant difference between the no-split and split conditions ($t_{(102)} = .42, p = .67$). Participants did not differ in terms of their gender ($\chi^2(1) = .33, p = .56$), age ($F_{(1,103)} = .18, p = .67$) or monthly spending on clothes ($F_{(1,103)} = .41, p = .51$) across the two experimental conditions.

## 4.4. Results

To test H2, we used a binary logistic regression in which prosocial redemption is the dependent variable, the split option is the independent variable, and altruism, involvement with the product category, and the number of LPs are covariates. The model displays a good fit ($R^2$ Nagelkerke = .33, $p < .001$). In line with H2, offering a split-donation option (Wald = 7.14, $p = .01$) has a positive effect on prosocial redemption (percentage of respondents who intend to make a donation in the split condition = 28.30 % vs. 7.81 % in the no-split condition). Of the covariates, only altruism (Wald = 10.50, $p = .01$) has a positive effect on prosocial redemption.

To test H3, we conducted a mediation analysis using the recommended Hayes’ bootstrapping procedure (SPSS Macro Process Model 4, 5.000 bootstrap samples; Hayes, 2012). CSR image is the dependent variable, warm glow is the mediating variable, prosocial redemption is the independent variable and altruism, involvement with the product category, and the number of LPs are the covariates. Table 2 provides the detailed results. Prosocial redemption behavior significantly predicts warm glow ($\beta = 1.42; p < .001$) which in turn has a significant positive effect on CSR image ($\beta = .29; p < .001$). While the direct effect of prosocial redemption on CSR image is non-significant ($\beta = -.24; p = .44$), the indirect effect is significant ($\beta = .42; IC = [.1338, .7821]$), giving support to H3.

<table><caption>**Table 2**

Mediation results (study 2).</caption><thead><tr><th>Paths</th><th>β</th><th>t</th></tr></thead><tbody><tr><td colspan="3">DV = Warm glow</td></tr><tr><td>Prosocial redemption</td><td>1.42</td><td>3.94**</td></tr><tr><td>Involvement in the product category</td><td>.08</td><td>1.04</td></tr><tr><td>Altruism</td><td>.61</td><td>5.65**</td></tr><tr><td>Number of LPs</td><td>.20</td><td>1.65</td></tr><tr><td colspan="3">DV = CSR image</td></tr><tr><td>Warm glow</td><td>.29</td><td>3.62**</td></tr><tr><td>Prosocial redemption</td><td>-.24</td><td>-.76</td></tr><tr><td>Involvement in the product category</td><td>.23</td><td>3.53**</td></tr><tr><td>Altruism</td><td>.13</td><td>1.28</td></tr><tr><td>Number of LPs</td><td>-.03</td><td>-.02</td></tr><tr><td colspan="3">Direct and indirect effects</td></tr><tr><td>Direct effect of Prosocial redemption on CSR image</td><td>-.24</td><td>-.76</td></tr><tr><td>Indirect effects</td><td>Effect</td><td>CI</td></tr><tr><td>Prosocial redemption → Warm glow → CSR image</td><td>.42</td><td>[.1338, .7821]</td></tr></tbody></table>

## 4.5. Discussion

Study 2 extends Study 1. In addition to allowing customers to choose which charity to donate to, the mixed-reward LP enhances CSR image when it allows customers to split their donations between multiple charities rather than giving to only one. This result highlights how the mixed-reward LP’s option design influences its effectiveness. Furthermore, Study 2 highlights the process that explains the influence of a mixed-reward LP with choice of charity and split-donation option on CSR image: this reward design fosters prosocial redemption, which leads to the positive warm glow experience that positively transfers to CSR image.

## 5. General discussion

The academic literature on LPs is moving toward literature reviews (e.g., Chen et al., 2021; Kim et al., 2021) and meta-analyses (e.g., Belli et al. 2022), but takes no interest in mixed-reward LPs. Unlike traditional LPs that offer only self-benefiting rewards, this new type of program offers both self-benefiting and charity-benefiting rewards and lets customers choose which type of reward they want to activate. We fill this gap in the research with two experiments that draw on the literature on CSR and charitable giving. We show that customers attribute a better CSR image to a firm with a mixed-reward LP, compared to a traditional LP that offers only self-benefiting rewards. We also show that CSR image is further enhanced when customers of a mixed-reward LP can choose the recipient charity, rather than the charity being predetermined by the firm. Finally, we show that this type of mixed-reward LP has a more positive effect on CSR image when it allows customers to split their donation between several charities. By increasing the perception of autonomy and an active personal role (making choices), the split-donation option promotes prosocial redemption, resulting in greater warm glow that translates into a more positive CSR image.

### 5.1. Theoretical contributions

The insights from this research make important contributions to the literature on LPs in general. We introduce a broader, more socially-focused theoretical approach to the study of LPs that calls for a rethink of their role and design. For years, the research has studied customers’ responses to LPs from a self-benefiting perspective, focusing on the personal functional or symbolic benefits derived from LP membership (e.g., Agrawal et al., 2022; Meyer-Waarden et al., 2023). This perspective generally frames LP success in terms of financial or competitive outcomes for the firm (e.g., Lin and Bowman, 2022) and in

<footnote>*$p < .05$, **$p < .001$.</footnote>
terms of customers' attitudinal and behavioral responses (e.g., Hu et al., 2022; Nesset et al., 2021), neglecting to explore the design of other-benefiting rewards and the psychological mechanisms that might explain their effects. The fact that this type of reward is not mentioned in any of the three recently published literature reviews and meta-analyses of LPs (i.e., Belli et al., 2021; Chen et al., 2021; Kim et al., 2021) is further evidence of researchers' dominant focus on the self-benefiting orientation.

Given the philanthropic orientation of mixed-reward LPs, we approach them from the perspective of the charitable giving literature and argue that a shift from the utilitarian, transaction-based view to the social and societal perspective is necessary to fully grasp their positive effects. In doing so, our study contributes to the noteworthy movement for marketing for good (Chandy et al., 2021; Madan et al., 2023) and provides the first answer to Kumar's (2020) and Stourm et al.'s (2020) calls for research that extends CSR principles to the specific context of LPs. Mixed-reward loyalty initiatives are not only customer-centric tools to retain and enhance customers' repeat purchase behavior (Chen et al., 2021). They are also tools that pursue collective and other-oriented objectives through the positive social response they generate: prosocial redemption, warm glow and CSR image. Consequently, they can be considered as a new form of philanthropic orientation for firms, in addition to the more traditional initiatives of direct corporate donations (Langan & Kumar 2019), cause-related marketing (Jublee et al., 2023; Kuo et al., 2022) and checkout charity/round-ups (Han, 2022; Kelting et al., 2019). The fact that mere exposure to a mixed-reward LP enhances the firm's CSR image suggests that mixed-reward LPs are effective with both LP members and non-members.

Our research also enriches the nascent body of work on charity-benefiting rewards (Eason et al., 2015; Hwang and Choi, 2020). That literature has so far concluded that self-benefiting rewards outperform charity-benefiting rewards in terms of increasing loyalty intentions. However, by studying LP rewards that offer both self-benefiting and charity-benefiting options (which is more realistic), we show that charity-benefiting rewards are effective too, and we provide evidence of their advantages (compared to self-benefiting rewards) for both the firm (CSR image) and the customer (prosocial redemption, warm glow). More specifically, we shed light on the role of option design in fostering mixed-reward LPs' positive outcomes. In addition to the choice of reward recipient (self-benefiting vs. charity-benefiting), the choice (vs. no choice) of the charity that will receive the donation, and the choice of donation split (all to one charity vs. split donation between two or more charities) are critical options. The findings concerning a split-donation option are an important contribution of this research, because that option has the power to counterbalance the feelings of unfairness that can arise when donation settings offer a choice of recipient charities (Ein-Gar et al., 2021). When customers can donate to several charities of their choice, and choose the level of donation to each charity, they are not caught in a dilemma between their desire to help and their desire to be fair.

Finally, our findings extend the large existing body of literature on the formation of a firm's CSR image, which generally shows that CSR initiatives have a direct positive effect on CSR image without investigating the mechanisms involved (e.g., Gupta and Pirsch, 2008; Lee et al., 2019; Lu et al., 2020). Some studies fill this gap by highlighting cognitive mediating variables such as brand trust or a firm's perceived effort (Khan and Fatma, 2023; Parguel et al., 2011). We add to this literature by demonstrating that mixed-reward LPs enhance CSR image through a two-level process: an engagement-based mechanism (prosocial redemption) and a psychologically-based mechanism (warm glow). In other words, CSR image should be considered not only in terms of how CSR initiatives shape perceptions of a firm, but also in terms of the benefits for customers.

## 5.2. Practical implications

Firms are looking for ways to engage with CSR more and to communicate this engagement to their customers (Kim et al., 2023; Lombart and Louis, 2014; Min et al., 2023). Our findings show that a mixed-reward LP is a "worth the investment" tool because it can help firms achieve these objectives by fostering prosocial behavior and producing positive feelings of warm glow that translate into a more positive CSR image. Consequently, senior managers should extend the strategic use of LPs in at least two ways. First, they should consider and manage LPs as CSR initiatives in addition to ways to retain customers and develop their purchase behavior. To succeed in this endeavor, they should encourage greater cooperation between marketing, communication and CSR departments inside the organization. Second, to assess the contribution of mixed-reward LPs, senior managers should look beyond the traditional loyalty metrics and regularly measure the LPs' social benefits for the firm, i.e., CSR image, for the customer, i.e., warm glow, and even for the partner charities, i.e., total amount of donations collected.

Beyond senior managers, our findings have direct implications for middle managers involved in the design of mixed-reward LPs. First, the choice of the recipient charity should be made by customers rather than the firm. That option signals higher levels of CSR engagement (e.g., intrinsic motivation, Parguel et al., 2011), which translate into better CSR image perceptions. One common practice is allowing customers to choose a charity from a list of partner charities supporting a range of causes. Second, firms should allow split donations, giving customers the option to share their points between several charities. This empowers customers, leading to higher levels of engagement (Schweitzer and Mai, 2022), as measured here by prosocial redemption behavior. Third, as our findings show that prosocial redemption enhances CSR image through warm glow, middle managers should find ways to encourage their customers to favor charity-benefiting over self-benefiting rewards when they redeem their points. For instance, they can maintain customers' interest in charity rewards by rotating the list of partner charities and running special communication campaigns responding to recent events. In 2020, during the Covid pandemic, Etihad Airlines encouraged their customers to support and protect refugees around the world through the firm's donation program. They should also allow small donations instead of setting high point redemption thresholds and ensure that the donation process for charities is straightforward and user-friendly.

In line with the objective of encouraging customers to favor the charity-benefiting over the self-benefiting option, the findings also offer practical implications for middle managers involved in the communication of the program. They should make customers aware— in their emails, newsletters, app notifications, and on websites – of the existence of the charity-benefiting options and why they are valuable for the partner charities. For instance, Mango regularly reports to customers on the amounts of donations collected through loyalty points and how they were used to make a positive impact. Managers could also include a reminder of the charity-benefiting donation options when informing customers of the expiry dates of their loyalty points, and offer symbolic incentives for customers to give their points to charities (e.g., exclusive advance access to the new collection). Finally, they should regularly seek customer feedback on the charity donation option and make improvements based on the suggestions received. Overall, such win-win new practices would give a noble meaning to customer loyalty and might stem the decline in active usage of LPs in general (Steinhoff and Zondag, 2021).

From a public policy perspective, our findings yield several practical recommendations. As they indicate that offering choice enhances consumer engagement in charitable giving and increases the perceived legitimacy of CSR efforts, thereby aligning corporate incentives with public welfare, policy makers could promote such practices through targeted incentives (e.g., tax benefits, certification programs). They
might also consider mandating that mixed-reward loyalty programs provide customers with the option to select charities or allocate donations. Additionally, policy makers could collaborate with companies offering mixed-reward loyalty programs to guide charitable contributions toward government-backed organizations or social initiatives. In return, they could introduce standardized reporting metrics for CSR-related loyalty programs, similar to existing sustainability reporting frameworks. Such measures would help companies transparently disclose how charities are selected and what proportion of rewards are allocated to them, enabling stakeholders to assess the effectiveness of these programs in generating meaningful social impact.

### 5.3. Limitations and further directions for research

This study admittedly has some limitations that should be addressed in future research. First, while we used a single empirical setting (i.e., the same retail sector and the same fictitious brand) and progressively built on each experiment, previous research demonstrates that prosocial behavior is influenced by product category type (hedonic vs. utilitarian, e.g., Chang and Chu, 2020). Further research should thus test this conceptual framework in other empirical settings in order to increase the generalizability of our findings. Second, we investigated the impact of mixed-reward LPs on intentions to act in a prosocial way. Although this is in line with previous work on charitable giving behavior in general (e.g., Giebelhausen et al., 2016) and donations embedded in LPs in particular (e.g., Eason et al., 2015), more research is needed to investigate real-life LP members' behavior. For instance, the question of whether mixed-reward LPs are more effective than traditional, self-benefiting reward LPs at encouraging redemption of unused points deserves deeper investigation, given that worldwide, there are 48 trillion LP reward points waiting to be redeemed, worth a total $360 billion (Colloquy, 2017 cited by Ramp Rewards, 2018). Could mixed-reward LPs reduce the volume of points that are “wasted” because they expire before customers use them? And could they limit stockpiling behavior by members and reduce firms' liabilities when there is a permanent validity option (Stourm et al., 2015)? Third, we studied the “bright” side of mixed-reward LPs by investigating their positive social effects in terms of prosocial redemption, warm glow, and CSR image. However, like any charitable initiative, mixed-reward LPs might encourage moral cleansing behavior (Schlegelmilch and Simbrunner, 2019) and produce counter-productive effects on the environment and society in general, if members continue to increase their consumption and favor the

self-benefiting option. Therefore, future studies are needed to examine the potential “dark side” of mixed-reward LPs. Fourth, charitable giving behavior may be prompted or inhibited by a myriad of features related to consumers' psychographic profile (Sujo and Ashwin, 2021). Hence, the general question of which customers are most inclined to donate their loyalty points and under which conditions deserves additional investigation to help managers enhance the positive social impact of mixed-reward LPs. Finally, this research focused on the redemption of the loyalty points. However, the very way in which these points are collected and delivered can foster prosocial behaviors (e.g., Flacandji et al., 2023; Liu and Mattila, 2016). Hence, a notable stream of additional research would be to examine how features such as the type of rewarded behavior, reward visibility as well as the mechanisms and timing of reward distribution should be designed in order to enhance the effectiveness of CSR oriented loyalty programs.

### CRediT authorship contribution statement

**Aida Mimouni-Chaabane:** Methodology, Writing – original draft, Formal analysis, Conceptualization, Project administration, Data curation. **Béatrice Parguel:** Software, Conceptualization, Writing – original draft, Methodology, Data curation, Formal analysis.

### Declaration of use of “generative artificial intelligence” technologies

During the preparation of this work, the authors used ChatGPT to improve the readability and language of the manuscript. After using this tool, the authors reviewed and edited the content as needed and take full responsibility for the content of the published article.

### Declaration of competing interest

The authors whose names are listed immediately below certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers' bureaus; membership, employment, consulancies, stock ownership, or other equity interest; and expert testimony or patent licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript.

## Appendix 1. Experimental stimuli

<table><thead><tr><th colspan="3">Stimuli for Study 1</th><th colspan="1">Stimuli for Study 2</th></tr><tr><th>Self-benefiting LP</th><th>Mixed-reward LP- Predetermined charity</th><th>Mixed-reward LP- Chosen charity</th><th></th></tr></thead><tbody><tr><td><img src="stimuliSelfBenefitingLP.png" alt="A stimulus image of a person receiving a reward, with the text 'LOYALTY PROGRAM REWARDS' and a logo. The person is shown wearing a hat and a shirt with the word 'GRIGIO' on the chest."></td><td><img src="stimuliMixedRewardLPPredeterminedCharity.png" alt="A stimulus image of a person receiving a reward, with the text '€1 SPENT = 1 POINT COLLECTED' and a logo. The person is shown wearing a hat and a shirt with the word 'GRIGIO' on the chest."></td><td><img src="stimuliMixedRewardLPChosenCharity.png" alt="A stimulus image of a person receiving a reward, with the text '€1 SPENT = 1 POINT COLLECTED' and a logo. The person is shown wearing a hat and a shirt with the word 'GRIGIO' on the chest."></td><td><img src="stimuliStudy2.png" alt="A stimulus image of a person receiving a reward, with the text 'LOYALTY PROGRAM REWARDS' and a logo. The person is shown wearing a hat and a shirt with the word 'GRIGIO' on the chest."></td></tr></tbody></table>
# Data availability

Data will be made available on request.

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