Buyer guide · Economics
Set reward economics before customers earn the promise.
A generous headline can hide an expensive fulfilment rule. Model direct cost, exposure, capacity, and customer consequences before publishing a threshold.
- Cost base
- Direct fulfilment cost
- Exposure
- Earned promises and redemptions
- Control
- Thresholds, dates, limits, terms
Short answer
Price the promise in direct cost.
Set reward economics from direct cost, not the menu price or discount headline. Estimate qualifying spend per reward, the share of earned rewards likely to be redeemed, capacity cost, and any stacking with other offers. Publish the main conditions clearly, then track actual exposure against the assumptions.
Decision criteria
Set the economic boundary first.
Qualifying spend, direct cost, perceived value, redemption, breakage, capacity, and stacking determine the real exposure.
Reward form
Choose an item, service, discount, or points reward whose perceived value is useful to the customer and whose direct cost the business can estimate.
Earning threshold
Set the qualifying spend or repeated actions required before the customer earns the promise.
Exposure controls
Define availability, expiry, minimum spend, usage limits, capacity rules, exclusions, and stacking before promotion.
Economic model
Separate face value from business cost.
A reward can feel valuable without costing the business its public selling price.
Perceived value
Use the value the customer recognizes. This helps judge whether the reward is worth pursuing, but it is not the business cost.
Direct cost
Count ingredients, purchased goods, payment fees, variable labor, shipping, and any capacity displaced by fulfilment.
Qualifying spend
Estimate the eligible customer spend or actions required to earn one reward under the published rule.
Breakage
Treat unredeemed earned rewards as an observed outcome, not a promise of free margin. Use a cautious range until the business has its own redemption history.
Worked economics
Make every assumption visible.
This illustrative example uses 100 completed cycles. Replace it with the business currency, costs, and customer behavior.
Threshold assumption
Ten qualifying visits at 12 each produce 120 of qualifying spend before one reward is earned.
Cost assumption
The reward sells for 12 and has a direct cost of 4. The face-value rate is 12 divided by 120, or 10%. The direct-cost rate is 4 divided by 120, or about 3.3%.
Redemption assumption
If 100 cycles complete and 70 rewards are redeemed, fulfilment costs 280. The other 30 are observed breakage only after their valid claim window ends.
Exposure check
If all 100 earned rewards are redeemed, direct cost reaches 400. The business should be able to carry that case instead of depending on breakage.
Supported controls
Match the control to the reward path.
Reward Loyalty provides several ways to bound earning and fulfilment. The operator still chooses sustainable values.
Points rewards
Configure point thresholds, active dates, content, and current reward availability. Earning rules, purchase minimums, and transaction limits shape how quickly customers reach them.
Stamp completion
Define the completion reward, customer-facing value, and whether staff physically confirm fulfilment. Purchase and stamp limits protect the qualifying rule.
Vouchers
Choose percentage, fixed amount, free product, or bonus-points value, then set dates, minimum spend, caps, usage limits, and eligibility where supported.
Achievements
Use the fixed achievement catalogue with an optional configured reward, cap, and award window. Do not invent custom milestone formulas in customer copy.
Operating review
Control cost without creating surprise.
Economic protection works best when customers can understand the same rule staff enforce.
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1
Create the worst credible case
Model high earners, full redemption, reward stacking, refunds or corrections, and a capacity-constrained day.
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2
Write stacking order
State whether the reward can combine with a voucher, price promotion, pass use, or another benefit. If staff cannot apply the order consistently, narrow it.
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3
Train fulfilment and correction
Name who validates the reward, records use, handles unavailable stock, and resolves a mistaken transaction.
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4
Compare assumption with evidence
Review rewards earned, redeemed, expired, corrected, and still outstanding. Thirty days can expose operational cost; it cannot settle long-term breakage or retention.
Product and operating limits
Use controls without hiding the promise.
- Reward Loyalty applies configured earning, reward, voucher, stamp, and achievement controls. It does not determine a profitable threshold or account for the operator’s margin and capacity.
- Breakage should not be used to advertise a reward the business hopes customers forget. Terms, expiry, exclusions, and fulfilment must remain clear.
- Hard limits reduce exposure, but unclear limits create staff disputes and customer distrust. Test customer-facing terms and the staff correction path together.
Implementation guides
Use current documentation for changing details.
Requirements, interfaces, settings, limits, and release behavior belong in the maintained product documentation.