Glossary
What is points expiry?
Points expiry is the rule that unused loyalty progress lapses after a set period, and it should be set from how often the business's own customers buy rather than copied from a larger scheme.
Expiry is the clause most often set thoughtlessly and the one most likely to destroy trust, because it deletes something a customer earned. The test is the customer's own buying cycle: a café customer visiting every few days is unaffected by a twelve-month expiry, while a garden centre customer buying each spring loses a full year's progress to the same rule. Where a purchase cycle is annual, any expiry under two years punishes normal behaviour. Some jurisdictions also regulate the expiry of anything resembling stored value, which is a reason to frame a balance as progress towards a reward rather than as credit.
How long should loyalty points last?
At least a year for a frequent-purchase business and at least two for a seasonal one, measured against how long a normal customer takes between visits rather than against what is convenient to administer.
A practical rule: multiply the longest ordinary gap between a customer's visits by four. For a salon on an eight-week cycle that lands near eight months, so an eighteen-month expiry is comfortably safe.
Does expiry have to be disclosed?
Yes, plainly and before the customer joins. Expired progress the customer did not know could expire is the single most common cause of loyalty disputes, and the fix is one sentence in the terms and the same sentence in the staff script.
Where a business trades in several countries, the disclosure requirements and the limits on expiry itself vary, so that is a question for a lawyer in each market rather than a setting to copy across.
Is expiry necessary at all?
Not for most independent businesses running a stamp or visit card. Expiry exists mainly to cap an accumulating liability, and a ten-stamp card does not accumulate one in any meaningful sense.
Where it does earn its place is a points scheme with a long horizon and a high threshold, because a balance that never expires is a promise with no end date. Even there, generous is better than tidy.
See also
- Breakage: Breakage is the value of loyalty rewards that are earned but never claimed, and it is the gap between what a programme appears to cost and what it costs.
- Reward threshold: The reward threshold is the number of stamps or points a customer must reach before earning a reward, and setting it correctly determines whether the programme motivates or discourages.
- Points programme: A points programme awards points in proportion to how much a customer spends (typically one point per unit of currency) and unlocks a reward once a threshold is reached.
Further reading
Stamps or points: which loyalty mechanic should you use?
How to pick the right loyalty mechanic for your business based on ticket variance, visit frequency and what you want customers to do more of.
How many stamps should a loyalty card have?
Setting the reward threshold too high kills motivation and too low erodes margin. Here is how to pick the number for your business.