Redemption types

A redemption type determines the method of loyalty value redemption. It is assigned when a redemption schedule is created and cannot be changed afterwards. The redemption types are:

  • Dollar Discount ($D)
  • Percent Discount (%D)
  • Offset (O)
  • Coupon ($C)
  • Percent Coupon (%C)
  • Offset Coupon (OC)
  • Reward Item (RI)

A redemption type defines how the loyalty value (points) is applied.

Dollar Discount

The Dollar Discount ($D) reward type converts a certain number of loyalty points into a transaction discount that is applied on a customer’s visit and purchase. For example, “$10 discount for 100 points”, “$20 discount for 200 points” etc.

Note: Normally the Dollar Discount redemption type is used in a loyalty program with the Price Points (PP) or Basket Points (BP) collection type.

Note: The $D reward type attempts to discount each individual item in the transaction proportionally to its price.* If an item is marked as non-discountable, the discount reward cannot be applied to it*. Therefore, this type of reward always calculates a “discountable subtotal” of the transaction, which may be less than the actual subtotal. Keep this in mind in order to avoid confusion when a transaction appears to have a sufficient subtotal for redemption, but the loyalty system does not prompt to apply the reward.

Percent Discount

The Percent Discount (%D) reward type converts a certain number of loyalty points into a percent discount which is applied to a future sale transaction. E.g. “10% discount for 100 points”, “20% for 200 points” etc.

Note: Usually the Percent Discount redemption type is used with Price Points (PP) or Basket Points (BP) collection types.

Note: Just as the $D reward type, this redemption attempts to discount each individual item in the transaction. If an item is marked as non-discountable, the reward cannot be applied to it. Therefore, this type of reward always calculates a “discountable subtotal” of the transaction, which may be less than the actual subtotal. Keep this in mind in order to avoid confusion when a transaction appears to have a sufficient subtotal for redemption, but the loyalty system does not prompt to apply the reward.

Offset

The Offset reward type is used in the cases when the $D or %D type of reward cannot be used – e.g., when the items cannot be discounted. The offset method uses a negative price charge which is added to the transaction, therefore discounting the subtotal without changing the item prices. For example: “$10 off for 100 points”, “$20 off for 200 points” – in each of these cases a negative charge with the price of -$10 (negative 10) or -$20 (negative 20) will be added to the transaction as a sort of rebate, therefore offsetting the subtotal without changing the item prices.

Note: Usually the Offset redemption type is used with the Price Points (PP) or Basket Points (BP) collection types.

Coupon

The reward type Coupon (C) works almost exactly as the $D reward, except instead of immediately applying the available loyalty discount to a sale transaction, the loyalty system issues a personal discount coupon (prints on the POS printer) which could be used in a future transaction. For example: “$10 coupon for 100 points”, “$20 coupon for 200 points”.

Reward coupon can be configured with validity time frame (valid “from” and “until”) - which is a great marketing tool to encourage the customers to visit more often and use the coupons before expiration date.

Note: Usually the Coupon redemption type is used with Price Points (PP) or Basket Points (BP) collection types.

Percentage Coupon

This reward type Percentage Coupon (%C) works almost exactly as the %D reward, except instead of applying the discount to the reward transaction, the loyalty system issues a personal discount coupon (prints on the POS printer) which could be used in a future transaction. For example: “10% coupon for 100 points”, “20% coupon for 200 points”.

A reward coupon can be configured with a validity time frame (valid “from” and “until”), which is a great marketing tool to encourage the customers to visit more often and use the coupons before the expiration date.

Note: Usually the Percentage Coupon redemption type is used with the Price Points (PP) or Basket Points (BP) collection types.

Offset Coupon

The reward type Offset Coupon (OC) works almost exactly as the Offset reward, except instead of applying an offset reward to the transaction, the loyalty system issues a personal discount coupon (prints on the POS printer) which could be used in a future transaction. The difference between C and %C is the type of the coupon: this coupon will be applied not as a discount, but as an offset. For example: “10% coupon for 100 points”, “20% coupon for 200 points”.

A reward coupon can be configured with a validity time frame (valid “from” and “until”), which is a great marketing tool to encourage the customers to visit more often and use the coupons before the expiration date.

Note: Usually the Offset Coupon redemption type is used with the Price Points (PP) or Basket Points (BP) collection types. Just as the Offset reward type it is best used in the retail stores where the items cannot be disounted for various reasons.

Reward Item

The reward type Reward Item (RI) awards an actual item at a discount or free - as a redemption of the loyalty points. It implements the type of a retail loyalty system which traditionally is handled by stamp cards. For example: “Buy 5 large drinks, get one at 50% off”, or “Buy 10 bags of dog dry food, get one free” (this particular program is widely known in the pet supply industry as “Frequent Buyer”).

The reward type works best with the Quantity Points (QP) collection type which helps to implement the stamp card scenarios. Typically, in such scenarios there are multiple loyalty programs, each of which is dedicated to a particular incentive group that is includes in aspecific collection schedules. Those incentive groups contain items which are grouped by similar attributes - the same or similar price, size, brand, but have a different flavor. For example: “all small hot drinks”, “all large cold drinks” for a coffee shop, or “Nutro Dog Large 40lb”, “Pedigree Dog Small 10lb” for a pet supply store. For every such incentive group the loyalty system will keep a separate count through the QP collection schedule, and the reward item will come out of the same incentive group (see the redemption rule “Same group as Collection Schedule” below).

The Reward Item redemption can also be used with Price Points (PP) or Basket Points (BP) in the form of a free gift in exchange for a number of redemption points. E.g. “Free OPI Nail Polish for 100 points”.