Loyalty Economics

Loyalty Points Liability Estimator

Estimate outstanding points, annual earn and expected liability from activity, redemption, expiry and cost-per-point assumptions.

Outstanding active points-Active members times average balance

Annual points earn-Expected new active-member earn

Expected liability-Redeemable points times cost per point

Liability per member-Spread across total membership

This is a planning estimate. Finance teams should reconcile with formal accounting policy, partner funding, deferred revenue and actuarial breakage models.