Resource · Calculator
Calculate what your loyalty reward really costs.
Enter your own qualifying spend, reward value, direct fulfilment cost, and expected redemption. The calculator keeps arithmetic separate from assumptions and never invents a profitable target.
Open the calculatorYour scenario
Enter only values you can explain.
Use one consistent currency or money unit for every monetary field. No account or personal information is used. Your entries stay in this browser tab and are not submitted to Reward Loyalty.
Results
The calculation will separate value from cost.
Complete the four required fields. Add a minimum redemption purchase only when it applies. Validation appears beside the field that needs attention.
Calculated scenario
Reward economics results.
- Face-value reward percentage
- 0%
- Arithmetic result: customer-facing value divided by qualifying spend.
- Direct-cost reward percentage
- 0%
- Arithmetic result: estimated direct cost divided by qualifying spend.
- Expected direct cost
- 0 money units
- Operator assumption: the arithmetic uses your expected redemption percentage; it does not predict redemption.
- Expected effective cost percentage
- 0%
- Operator assumption: expected direct cost divided by qualifying spend.
- Minimum redemption purchase
- No positive minimum entered
- A minimum is a redemption condition. It is not guaranteed incremental revenue and cannot establish profit without margin and behavior evidence.
Methodology
Every formula stays visible.
The first two outputs are direct arithmetic. The next two combine arithmetic with your redemption assumption. The minimum-purchase output provides context only.
Arithmetic result
Face-value reward percentage
reward face value ÷ qualifying spend × 100
Arithmetic result
Direct-cost reward percentage
direct business cost ÷ qualifying spend × 100
Arithmetic using an operator assumption
Expected direct cost
direct business cost × expected redemption percentage ÷ 100
Arithmetic using an operator assumption
Expected effective cost percentage
expected direct cost ÷ qualifying spend × 100
Context only; not a profit result
Minimum-purchase cost percentage
direct business cost ÷ minimum redemption purchase × 100
What the calculator cannot decide
It does not know gross margin, capacity, tax, product substitution, changed purchase behavior, breakage, discount stacking, or whether the minimum purchase is incremental. It therefore cannot label a reward profitable or recommend an ideal percentage.
Methodology sources
Illustrative example
A scenario, not a benchmark.
Suppose a reward requires 100 money units of qualifying spend, has a face value of 10, costs the business 4 to fulfil, uses a 60% redemption assumption, and requires a 20-unit purchase when redeemed.
The 20-unit minimum makes the 4-unit direct cost equal to 20% of that minimum purchase. It does not prove the purchase is additional, that its gross margin covers the reward, or that 60% of earned rewards will be redeemed.
Calculation steps
Use the result without outrunning the evidence.
- 1 Enter the earning thresholdEnter the qualifying spend required before the reward is earned.
- 2 Separate value from costEnter the customer-facing value and your estimated direct fulfilment cost.
- 3 State the redemption assumptionEnter an expected redemption percentage and an optional minimum redemption purchase.
- 4 Read arithmetic and assumptions separatelyCompare the calculated percentages without treating them as a forecast or profit result.