The Impact of Grocery Store Rewards Cards on Saving and Asset Accumulation in Children’s Savings Account Programs

Objective: Although children’s savings accounts (CSAs) are designed for accumulating higher education savings with specific incentives and explicit struc-tures to encourage savings, they often benefit low-income families the least because these families’ saving efforts are frequently hindered by their scarce financial re-sources. To address this issue, some CSA programs have experimented with grocery store rewards cards that pay a percentage of purchases directly to CSAs. Method: This study conducted two cluster randomized trials using household-level random assign-ment to test the impact of a rewards card program in two locations: Wabash County, IN (Study 1: N 5 1,390 households; 1,817 account holders), and St. Louis, MO (Study 2: N 5 8,351 households; 9,586 account holders). Results: The treatment group in Indiana had a nearly twofold increase in savings activity in CSAs compared to the control group. In St Louis, the treatment group had a greater than sevenfold increase in savings activity in CSAs compared to the control group. Conclusions: These findings sug-gest that rewards cards can be an effective strategy for engaging families of different backgrounds in saving activities.