Petco’s revamped loyalty program saved customers money, but it left the retailer in the doghouse, costing the company millions.
The new Petco Perks program delivered far more reward redemptions than expected, cutting into sales by “mid-single-digit millions of dollars” during the second quarter of 2026, executives revealed in an earnings call last week, according to Retail Dive.
The surprise hit came after Petco relaunched Perks in late June with a simpler rewards system designed to make earning and redeeming points easier for customers and employees. Members earn 10 points for every $1 spent on most products and 30 points per $1 on Petco’s private-label brands. Every 1,000 points can be redeemed for $1 off a purchase.
The program appears to have worked a little too well. Before the relaunch, Petco’s sales were running ahead of its second-quarter forecast, according to CFO Sabrina Simmons. But the company ultimately reported essentially flat year-over-year sales after the unexpectedly high reward redemptions took their toll.
Petco CEO Joel Anderson said the company “acted swiftly to deploy post-launch guardrails on redemption velocity,” and executives believe the biggest wave of redemptions has now passed, Retail Dive reports.
Despite the costly start, Petco isn’t abandoning the program. The company says it plans to make Perks more personalized, including targeted offers aimed at encouraging customers to spend more.
“We expect our new membership program to serve as a key catalyst that supports our long-term growth, and we are encouraged by early personalized offer tests,” Anderson said on the call, according to Retail Dive. “The balance of the year will be focused on these capabilities, and we expect a positive impact to emerge in 2027.”
There was some good news in Petco’s latest results: Same-store sales rose 0.6 percent year over year in the second quarter, marking the company’s second consecutive quarter of comparable-sales growth after four straight quarters of declines last year.
“We remain confident in our ability to generate sustainable, long-term growth,” Anderson added in a statement.
Petco operated more than 1,500 stores across the U.S., Mexico and Puerto Rico, according to the company’s website.
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