Regular Loyalty Program: Loyalty Points Accrual and Reversal

In this article, you will understand how points are accrued (both pre-tax and post-tax) and reversed in a Regular Loyalty Program.

Points Accrual: Overview

  • Any guest (existing or new) visiting a center is automatically enrolled into the Regular Loyalty Program (unless specifically restricted to members).
  • Points are accrued based on the amount spent to avail a service, buy a product, or for performing specific actions, for example, referring a new guest, giving feedback, etc.
  • Points are accrued when payment is made using cash, card, check, or custom payment. You can configure pre-paid card to award points as well.
  • Points accrued in a Regular loyalty programs is accrued based on your pre and post-tax settings.
  • Points are accrued immediately when an invoice is closed.
  • Points that are awarded for online actions expire in 365 days.
  • Points awarded for all other actions have no expiry.

Points Accrual: Pre-tax and Post-Tax

For a Regular Loyalty Program, you can specify if the points must be accrued or redeemed on the pre-tax or the post-tax amount. For more information on how you can configure this option, see Configuring a Regular Loyalty Program and Consider only Closed Invoices section of Configuring a Tiered Loyalty Program.

Below are examples to understand how points are accrued in pre-tax scenario:

Points Accrual: Pre-Tax

If a guest avails a service worth $300, the tax is 5%, and if the guest is entitled to receive 20 loyalty point for every 100 dollars spent, let us see how points are accrued in a Pre-Tax scenario: 

Accrual: Pre-Tax
Cost of Service $300
Points Accrued on Pre-Tax Amount 60
Tax at 5% on cost of service $15
Total Due $315

The guest spends $315 in total, but points are accrued on the pre-tax amount of $300.

Points Accrual: Post-Tax

If a guest avails a service worth $300, the tax is 5%, and if the guest is entitled to receive 20 loyalty point for every 100 dollars spent, let us see how points are accrued in a Post-Tax scenario: 

Accrual: Post-Tax
Cost of Service $300
Tax at 5% on cost of service $15
Total Due $315
Points Accrued on Pre-Tax 63

The guest accrues points on the total amount spent. In this case points are accrued on $315 payment

Pre-Tax vs Post-Tax: In a Nutshell

Pre-Tax Amount

  • Does not award points on the tax component of the invoice. Meaning, points are awarded only on the payment which is an income to the organization.
  • It is equivalent to offering a discount to a guest.
  • This setting is more organization friendly as points are awarded only on the amount spent by the guest towards a service or product and not the total amount.

Post-Tax Amount

  • Awards points on the complete invoice including tax.
    Meaning, points are awarded even on the tax component (not an income to the organization).
  • It is equivalent to direct payment like cash or check.
  • This setting is more guest friendly as points are awarded on the total amount spent. 

Points Reversal

In a Regular Loyalty program, loyalty points are reversed based on the following:

  • If an invoice is refunded, the points are not reversed.
  • If an invoice is reopened, the accrued points for that invoice are reversed. When the reopened invoice is closed, points are accrued based on the new amount spent.
  • If an invoice is reopened, and if there are no balance points available to reverse (because the guest has already redeemed them), the guest's points balance will turn negative and any points accrual will be used towards the clearing of the negative balance.

Examples:

  1. If a guest avails a service worth $300, makes a payment, and 60 points are awarded. If the organization decides to refund the payment due to any reason (for example, guest is not satisfied with the service), here is what happens to the points:
    • The awarded points (60 in this case) are not reversed.
  1. If a guest buys a product worth $300, makes a payment, and 60 points are awarded. If the guest decides to exchange the product for another product worth $250, here is what happens to the points:
    • When the invoice is reopened, the points awarded for the invoice (60 in this case) become zero.
    • When the invoice is closed again, new points are awarded (50 in this case).

See Also

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