Managing Loyalty Points: Earning and Redemption

Managing Loyalty Points: Earning and Redemption

Overview

Loyalty points are the currency of customer engagement. iVendNext provides a robust system for tracking, awarding, and redeeming points across all sales channels. This guide covers everything from point accrual rules to seamless redemption processes, ensuring you maximize the value of your loyalty program.





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

  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

❌ 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

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


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