As retail reward programs experience growing consumer participation,retailers have started to replace traditional price discounts with item-based reward promotions,which offer extra reward points for some selected items.This paper investigates the impact of item-based reward promotions on consumer purchase behavior using a multicategory consumer choice model,which captures consumer cross-category purchasing behavior.The results show that item-based reward promotion elasticity varies significantly across brands and categories and that there are cross-category effects of reward promotions.The authors also decompose price and reward point elasticities and find that reward point promotions and price discounts have different effects on primary and secondary demand.Furthermore,the authors find that consumer reward sensitivity may change over time; the more consumers become exposed to reward promotions,the less likely it is that they will make a purchase without rewards.