Segregation vs aggregation in the loyalty program: the role of perceived uncertainty Youjae Yi College of Business Administration, Seoul National University, Seoul, South Korea Hoseong Jeon College of Business Administration, Hallym University, Chuncheon, South Korea, and Beomjoon Choi College of Business Administration, California State University, Sacramento, California, USA Abstract Purpose – The present study seeks to examine how perceived uncertainty of reward schedule and reward frame (i.e. segregated vs aggregated) affect consumers’ evaluation of loyalty programs. Design/methodology/approach – The authors conducted three experiments to test the hypotheses. Findings – Ambiguity aversion was salient when the subjects perceived low uncertainty in the schedule of a loyalty program, which led to customers’ choice of a loyalty program with an aggregated frame. In contrast, the subjects displayed ambiguity proneness when they detected a high level of uncertainty in the reward schedule; as a result, the subjects preferred a loyalty program that employed a segregated frame. Research limitations/implications – The findings show that individuals adopt different types of attitudinal pattern and show dissimilar choice behaviors depending on reward schemes. The findings also provide insights to enhance the understanding concerning how consumers perceive the value of loyalty programs. Practical implications – Previous research suggests the importance of random elements in relationship marketing. The present study supports this assertion by demonstrating that reward programs providing unexpected benefits can enhance the effectiveness of a loyalty program. Originality/value – The results provide a more refined understanding about the relationship between perceived uncertainty and reward frame and the psychological mechanism underlying this relationship. Keywords Loyalty program, Reward frame, Uncertainty attitude, Segregation, Aggregation, Customer loyalty, Uncertainty management Paper type Research paper The current issue and full text archive of this journal is available at www.emeraldinsight.com/0309-0566.htm The authors thank Janghyuk Lee and anonymous reviewers for constructive comments on the earlier version of this paper. This research was supported by the Institute of Management Research at Seoul National University. EJM 47,8 1238 Received 9 March 2011 Revised 10 August 2011 19 November 2011 Accepted 14 February 2012 European Journal of Marketing Vol. 47 No. 8, 2013 pp. 1238-1255 q Emerald Group Publishing Limited 0309-0566 DOI 10.1108/03090561311324309