Free Money Or Financial Tool? Why Gen Z Is Rethinking Rewards Points

Rewards points are supposed to feel like a bonus—but for many young Canadians, they’re becoming something far more psychological. A new TD survey found that Gen Z consumers often treat rewards as “free money,” redeeming points impulsively, rushing to use them before they expire, or cashing them in for things they don’t even really want. Now, TD’s “Living on Rewards” challenge is putting those habits to the test by asking creator Mel Hwang to rely entirely on TD Rewards Points for a full week. In this Q&A with Anne-Lynne Davidson, Vice President, Loyalty Canadian Personal Banking, TD, we unpack what the experiment reveals about modern spending habits, financial pressure, and the surprisingly emotional way younger Canadians think about money and value today. —Noa Nichol

View this post on Instagram

The survey suggests many Gen Z Canadians don’t psychologically treat rewards points like “real money.” Why do you think that disconnect exists?

Many Gen Z Canadians still view rewards as a bonus rather than part of their everyday budget. In fact, 43% say they generally see rewards points as a “freebie,” which can make them feel less tangible than cash. That mindset is understandable, because points can sometimes feel abstract until you see how they translate into real-life value. There can also be a knowledge gap around the different ways points can be used, which is why education and awareness are so important. The opportunity is to help people better understand how rewards can be used more intentionally across everyday purchases and experiences, from essentials like groceries to the moments that make life more enjoyable. That is really the purpose of Living on Rewards, to make the value of TD Rewards Points feel more visible, practical, and connected to real life.

What does “Living on Rewards” reveal about the way younger Canadians think about spending, budgeting, and value today?

“Living on Rewards” reflects how younger Canadians are redefining value and looking for flexible, practical ways to stretch their budgets. For many Gen Z and Millennial consumers, rewards are most meaningful when they can be used in the moment—whether that’s helping cover groceries, a morning coffee, or a fitness class—rather than being reserved only for occasional splurges. The campaign follows creator Mel Hwang as she demonstrates what it could look like to live on TD Rewards Points across everyday purchases and experiences, helping make points feel more immediate and tangible. The campaign taps into culturally relevant moments to show how rewards could fit naturally into everyday spending and support real purchases and experiences. “Living on Rewards” is designed to help show Canadians how rewards can be used more intentionally, as a practical tool that delivers everyday value and helps them get more out of the spending they’re already doing. It also speaks to the pressure Canadians are under to balance rising costs with the freedom to still enjoy their lives.

View this post on Instagram

Rewards programs have traditionally been framed as perks or bonuses—do you think consumers are starting to see them differently in today’s economic climate?

Yes, we’re seeing rewards increasingly viewed as a practical financial tool. As the cost of living remains top of mind, Canadians are looking for ways to offset everyday expenses, and rewards can play a meaningful role in that. More than half of Canadians with a loyalty program already use rewards to offset costs like groceries, bills or gas, which shows that points are becoming more connected to everyday value. At the same time, 65% of Canadians say they would most likely redeem rewards for groceries, which reinforces how closely rewards can connect to the purchases people are already prioritizing. The shift is from seeing points as something extra to understanding how they can support purchases people are already making. For TD, the focus is on helping Canadians better understand the flexibility of the TD Rewards Program and the different ways points could show up in their day-to-day lives.

The challenge introduces the concept of scarcity and constraints around TD Rewards Points. How does that change the way people make decisions compared to casual rewards spending?

When points are treated as a limited resource, people tend to become more intentional about how they use them. It encourages a more thoughtful approach, where every choice has a trade-off, do you use points for an essential, save them for something later, or put them toward an experience? That is what makes the challenge interesting, because it turns rewards into something more tangible and shows how points could influence everyday decisions in real time. It also mirrors the way many Canadians are already making spending decisions, weighing what matters most and where they can get the most value. By bringing those decisions to life through Mel’s challenge, TD is helping audiences see the types of practical choices rewards could support, not just the final redemption moment.

View this post on Instagram

Beyond earning points, what are the smartest ways consumers can maximize rewards without falling into the trap of impulsive redemption?

 One helpful approach is to think about rewards with a little more intention. Instead of redeeming points simply because they are available, Canadians can look at where points could add the most value for their own needs, whether that is an everyday purchase, a planned expense, or something they have been saving toward. We know nearly 1 in 5 Canadians have redeemed rewards for something they did not really want just so they would not go to waste, which shows why awareness and planning matter. That behaviour points to a real opportunity; when people understand the breadth of where and how points could be used, they can make choices that feel more meaningful to them. When people better understand how their rewards can be used, points can feel less like an afterthought and more like a practical part of everyday spending. The goal is not to tell people there is only one “right” way to redeem, but to encourage them to think about how rewards can support their own priorities, from everyday essentials to experiences they care about.