Texas Trust's interchange generally averages somewhere between $0.20 and $0.25 a transaction, Minge said. The plan was, and still is, to give about half of that – $0.10 – away to local schools every time an enrolled member uses his or her debit card. It didn't take long for the $896 million, 77,000-member credit union to design and roll it all out, he noted; a member of the Texas Trust IT team managed the programming.

The first year, Texas Trust expected the program to generate $50,000 in rewards for the schools, Minge explained.

“We ended up giving that back in less than six months,” he said.

In total, through November 2015, Minge has cut rewards checks for $1,007,520.

“I think it can be scary when you look at it and you think, 'Gosh, I'm going to give some of the income that I'm currently getting back. Is this really a good idea?'” he said.

But for Texas Trust, the answer seems to be yes. Members of the program use their debit cards 17% more per month than regular cardholders do, according to the credit union, though the average spend is about $38 versus $42 for unenrolled cardholders. Almost 26% of its debit cards are in the program, and the deposit and loan totals for enrolled members grew by 10% in 2015. For the year to date, Texas Trust said, products per account grew 24% for Spirit debit cardholders compared to 19% for regular cardholders.

Millennial Magnetism

But there's another reason experts say debit rewards programs are increasingly seductive: They're a hit with millennials, according to Keith Brannan, chief marketing officer at the Austin, Texas-based Kasasa by BancVue, a financial services and technology firm that operates rewards programs for financial institutions, including about 375 credit unions.

“They don't mind someone making them better and better offers,” he said. “They are very attracted to it from a loyalty brand standpoint, and all the research says that if you make an offer and you continue to make those offers of loyalty and rewards to them, they are more and more loyal to you.”

The stakes are high. According to a survey last year of 4,000 consumers by Accenture, millennials are much more likely than other age groups to switch financial service providers, and they're very likely to blame high fees and poor loyalty programs for it. Online services, reasonable fees, branch convenience and loyalty rewards programs are major factors in their choice of institutions, according to the survey results.

Typically, credit unions pay Kasasa a flat amount per account, Brannan said (the amount varies with account volume, though). The biggest sources of return for the credit union are more swipes and savings, he explained. To participate, the enrollees usually must use their cards at least 12 times per month and adopt e-statements.

“Once people start using their card, we notice that behavior sticks and they use it a lot more times than 12,” he added. “We have institutions where their average number of uses is between 25 and 40 times a month; especially on a joint account.”

Moving to e-statements also saves credit unions between $2.25 and $2.50 per account, per month, he said.

“We run in the $2 range,” he said. “Just by that alone, each account starts being profitable.”

Local Love

Cash back is the most popular type of debit reward, and interest-bearing accounts are common, too, Brannan said. But there's also a gold mine in offering special discounts or rewards for using debit cards at certain merchants, according to Dante Dominick, director of marketing, financial institutions at the Austin, Texas-based Buzz Points.

Credit unions such as the Elkhart, Ind.-based INOVA Federal Credit Union have launched partnerships with Buzz Points so that their members can earn points for debit use and then redeem those points for gift cards, cash cards and donations to local nonprofits. Credit unions pay an enrollment fee for each participating household, and members get extra points for using their cards at merchants that join the company's preferred network, which includes more than 75,000 businesses nationwide, according to Dominick and the company.

Again, the value proposition is more of that uncapped interchange. According to the company, members of credit unions that belong to Buzz Points have 65% more debit card swipes per month than the national average and generate $3 to $6 more per month in interchange revenue, he said.

Cross-selling programs also add revenue, he said, because members can amass points for using other products or taking out, say, an auto loan.

Back to Life

In many ways, debit rewards are like those soap opera characters who get shot, fall over cliffs and die in fires, yet somehow reappear five episodes later.

“The Durbin Amendment did slow things down a little bit,” Dominick said. “A lot of people that were interested in it started to slow down to see how things were going to shake out. But interest has picked back up.”

Now, 50% to 60% of financial institutions in the U.S. offer debit rewards programs, according to a study published in April by Mercator Advisory Group. And 53% of credit unions say they're likely to add a debit rewards program in the next 12 months, according to a survey conducted by CUNA Strategic Services and Buzz Points.

“I think that others out there could benefit from the same philosophy that it's a great benefit for your member,” Minge said. “It's a good differentiator for you in the community. If you do it right, you can grow and prosper probably faster than you would if you didn't do it.”