Purpose New approaches in loyalty programs try to activate membership by rewarding not just financial transactions but also customer engagement. The purpose of this paper is to analyze the effect of rewarded customer engagement on loyalty intentions and behavior by applying a social media context. Design/methodology/approach A field study in the mobility service industry (focus groups (n=18) and questionnaire (n=1,246)) and a laboratory experiment (n=141, 2 (rewarded engagement and transaction/rewarded transaction)×2 (low/high reward) between subjects design) were conducted to determine the effect of rewarded engagement on loyalty. Findings In the field study, the participants could gather loyalty points through their social media engagement. Their attitudinal loyalty to the loyalty program and the company was significantly higher than that of the loyalty members who collected points solely through transactions. This effect is especially prevalent with respect to engagements rewarded with monetary incentives and is underlined by behavioral data. The results of the laboratory experiment show that rewarded engagement positively moderates the impact of intrinsic motivation on loyalty intentions. Offering rewarded engagement in loyalty programs offsets the undermining effect of rewards. Practical implications Rewarding customers for social media engagement can be a beneficial way of boosting active participation in loyalty programs, but this experience should be enjoyable and self-determined. Originality/value The study is the first to show the impact of rewarded customer engagement on the attitudinal and behavioral loyalty of members of a loyalty program.