As prices continue to soar and inflation hits record highs, a staggering 78% of Americans are living paycheck to paycheck. That strain is especially felt in the multifamily space. According to The Census Bureau, nearly half of renters (49.7%)–representing over 21 million households–are classified as cost-burdened, meaning they spend more than 30% of their income on rent.

For owners and operators, this poses a significant challenge. Financially stressed residents are more likely to have difficulties paying their rent on time or may be forced to move out, resulting in higher turnover rates and loss of revenue. Fortunately, innovative approaches can help mitigate these risks while providing a bit of financial relief for residents. One initiative making an impact is the implementation of a rewards program powered by a digital payment platform.

Why Reward Programs are Effective

Across nearly every industry, customers prefer companies that offer a rewards program, with 75% of consumers indicating they favor businesses that do so. A rewards program can provide residents some financial relief by allowing them to earn points that can be redeemed for cash back on rent, discounts at local shops, or other cost-saving benefits.

For residents living paycheck to paycheck, even a seemingly small reward can have a big impact. In addition to helping residents financially, rewards also can inspire positive resident behavior, such as posting reviews, renewing leases and paying rent early and digitally each month.

Rewards and Digital Payments - A Powerful Combination

Offering a rewards program within a digital payments platform, is a powerful way to incentivize the use of digital payments, making paying rent easier and more efficient for everyone involved. It also allows operators to cultivate a community where residents feel appreciated and supported. Driven by the prospect of earning rewards, residents are often excited to use the platform and even have the option to pre-schedule their payments, ensuring their largest monthly expense is paid on time and with ease. This blend of convenience contributes to greater overall satisfaction, leading to more long-term residents.

For property managers, the advantages are clear–fewer late payments, a more reliable revenue stream, and the security of chargeback protection against disputes or bad payments. In addition to streamlined payments, resident rewards encourage behavior that drives community success and resident happiness which leads to higher retention rates and improved all-around financial stability.

With 40% of multifamily organizations already leveraging a rewards program and 92% of owners and operators acknowledging the benefits, it's clear that rewards not only supports resident satisfaction but also gives management groups a competitive edge.