Set points and reward values customers can understand

Published October 1, 2026

Points create a second currency inside your store. Customers need to understand how they earn it, what it can buy and when they can use it. Merchants need to understand how the reward changes order contribution. A points rate can look generous in a marketing panel while hiding a redemption value that is either too small to matter or too expensive to sustain.

Translate points into a simple example

Start with two settings: points earned per unit of spend and points required for a reward. Suppose a store awards 5 points per $1 spent and offers $5 off for 500 points. The customer earns 5% of spend in points by face value: $100 of eligible spend earns 500 points, which can be exchanged for $5 off. That is a 5% face-value reward before any reward minimum-order condition or point reversals.

That percentage is not automatically your realised cost. A customer may never redeem; a reward may have a minimum-order condition; and the order may include items with different margins. Product exclusions control point earning and automatic tier discounts, not the scope of customer-redeemed reward codes. Model the configured reward code against the order once its minimum condition is met rather than assuming product exclusions will narrow it. Do not rely on non-redemption to make an uneconomic program work.

Calculate the cost using contribution

For a $100 basket with $60 cost of goods and $8 pick, pack and delivery expense, contribution before marketing and overhead is $32. If a $5 reward is applied to that basket, the amount becomes $27 before other costs. If the basket already has a 10% sale discount, a separate $5 reduction may further cut revenue depending on the discount rules. The $5 nominal reward therefore should be evaluated against the actual eligible basket and stacking behaviour.

Use three scenarios: a typical order with a reward redeemed, a low-margin order with a reward redeemed, and a promotional order with an existing discount. For each, record revenue before reward, product costs, variable fulfilment costs, existing discounts, reward discount and resulting contribution. This reveals whether earning exclusions, a reward minimum order or a different reward value is needed. Exclusions will not restrict the redeemed code’s product scope.

Choose a reward customers can reach

A threshold that requires months of routine shopping may feel theoretical. Estimate how much qualifying spend a typical member makes and translate the threshold into an approximate number of purchases. If a 500-point reward takes five $20 purchases at 5 points per dollar, say so plainly in your planning and check whether that cadence matches real behaviour.

Offer a small number of choices initially. Several denominations can increase choice, but each adds copy, cost and testing. Check that the customer can see their current balance, the threshold and the reward’s terms near the redemption action. Explain which products earn points, how tier discounts work, any reward minimum order, expiry and what happens after a refund. A refund may reverse points from the original purchase, so the displayed balance should follow the documented policy.

Keep the rule consistent across tiers and boosts

In Gibbond, a tier threshold is based on lifetime points. A tier multiplier affects earning; a configured tier discount may apply automatically at checkout. A boost is either a multiplier or a flat bonus. When a member has a tier multiplier and an active boost, the best rate applies, and a flat bonus is added separately under the product rules. Avoid calculating a campaign budget as if all percentages simply stack.

Document the business guardrails

Before publishing, write down which products earn points, the reward-code value and minimum-order condition, whether discounts can combine, and who reviews exceptions. Make a small sample calculation part of campaign approval. Then compare expected and actual redemptions after launch, alongside contribution and repeat purchase. Revise thresholds only with a clear explanation for existing members.

Transparent value helps customers decide whether membership is worthwhile. A conservative, well-explained reward is more useful than a large points balance whose real-world value is difficult to understand.