ST. PETERSBURG, Fla.–Consumer spending for May suggests continued momentum, albeit at a slower pace than prior years, according to the June edition of the Velera Payments Index, which also includes a deep dive into digital payments.

“Growth in year-over-year purchases and transactions was positive, with debit results stronger than credit.” Velera reported. “Part of this is supported by low unemployment and steady job growth, which aids consumer confidence. Consumer goods again had the highest contribution to growth in May 2025 for credit and debit purchases. And while inflation has been trending downward, worries over the impact of tariffs have created anxiety that has been somewhat suppressed in the near-term.”

The report noted that much of the economic uncertainty stems from the expected impacts of the Trump import tariffs and the reciprocal impact of tariffs on U.S. exports. 

Effects on Rewards

Meanwhile, the report found some generational differences when it comes to rewards programs.

“Rewards and loyalty programs are most effective when they reflect the real behaviors and preferences of members,” Annie Cox, VP-product management, said in a statement. “Our analysis shows that while Boomers and Gen X generate the majority of rewards earnings, they tend to redeem less frequently – often saving for larger redemptions or letting points expire. In contrast, Millennials and Gen Z are more active redeemers, using rewards as part of their everyday financial strategy. Income also plays a key role, with lower-income members redeeming at higher rates, suggesting a greater reliance on the tangible value rewards provide.

‘Importance of Segmentation’

“These patterns highlight the importance of segmentation – not just by age or income, but by lifecycle and behavior,” Cox continued. “Credit unions that design flexible, personalized rewards experiences based on these preferences and relationships will be better positioned to build loyalty, increase engagement and become the trusted, go-to financial partner for every member segment.”

The Key Takeaways

According to Velera, the key takeaways related to rewards and incentives include:

• The two oldest generational segments (Boomers+/Gen X) historically represented 67.3% and 88.5% of rewards accounts and earnings, respectively, while the remaining generations collectively accounted for only 11.5% of rewards earnings, despite accounting for 32.7% of account mix.
• Boomers+ and Gen X demonstrated lower rewards redemption/earned ratio at 14.6% and 15.9%, respectively, compared to younger cohorts ranging from 26.5% to 34.9%. 
• Cash consistently represents the majority of Rewards redemptions, with the exception of the holiday season, when a downturn in cashback was mirrored by an uptick in gift card redemptions. 

The full report is available for download here