Managing Loyalty Points: Earning and Redemption

Managing Loyalty Points: Earning and Redemption

Overview

This article gives you an overview of how iVendNext tracks, awards, and redeems loyalty points across all sales channels.





How Customers Earn Points?

1. Purchase-Based Earnings

  • Standard Rate: Configure points per dollar spent (e.g., 1 point per $10)

  • Tiered Multipliers: Higher tiers earn bonus points (e.g., Gold members get 2x points)

  • Product-Specific: Award extra points for featured/category items


Example Setup:


  1. Navigate to Loyalty Plan > Plan Details

  2. Set Calculation Basis = "Amount"

  3. Enter Award Value = "10" (points per $100 spent)


2. Alternative Earning Methods

  • Registration Bonus: Award 50-100 welcome points

  • Referral Rewards: Points for bringing new customers

  • Social Engagement: Points for reviews/social shares (requires integration)

  • Special Day Bonuses: Birthday/anniversary multipliers



Point Redemption Process

1. Redemption Rules Setup

Configure in Loyalty Level:


  • Conversion Rate: 100 points = $1 discount

  • Redemption Caps: Limit per transaction (e.g., max 20% of purchase)

  • Minimum Threshold: Require 500 points before first redemption


2. POS Redemption Flow

  1. Customer identification at checkout

  2. System displays available points balance

  3. Cashier applies points (or customer self-selects online)

  4. Automatic discount calculation



3. Redemption Scenarios

Transaction Value

Points Redeemed

Discount Applied

$100 purchase

500 points

$5 discount

$50 purchase

1,000 points

$10 (max 20% = $10)

$200 purchase

2,500 points

$25 discount




Accounting and Reporting

1. Automated Journal Entries

  • Earning Points:

    • Debit: Loyalty Points Expense

    • Credit: Loyalty Points Liability

  • Redeeming Points:

    • Debit: Loyalty Points Liability

    • Credit: Revenue/Sales Discount


2. Tracking Tools

  • Loyalty Journal: Real-time point tracking

  • Customer Statements: Monthly points summaries

  • Expiry Reports: Identify soon-to-expire points



Advanced Management

1. Point Expiry Policies

  • Fixed Date: All points expire December 31

  • Rolling Expiry: Points expire 12 months after earning

  • Grace Periods: Allow 30-day extensions


2. Manual Adjustments

  • Add Points: For service recovery

  • Deduct Points: For returns/refunds

  • Extend Expiry: For valued customers



Best Practices

Some of the best practices are:


  1. Communicate Clearly: Display point balances on receipts/apps

  2. Create Urgency: "Use 500 points by March 31 for bonus gift"

  3. Test Thoroughly: Validate earning/redeeming before launch

  4. Review Monthly: Adjust rates based on redemption patterns



Troubleshooting

Here’s a quick look at some common issues you might run into.


❌ Points Not Appearing: → Verify customer is enrolled in active program → Check transaction meets minimum criteria


❌ Redemption Errors: → Confirm sufficient points available → Validate redemption rules in Loyalty Level


Idea: Use "Points + Cash" promotions to boost redemption rates (e.g., "Get $60 item for 500 points + $40")



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