Points expiration

What are the benefits of point expiration?

When customers are not given any restrictions on when they may redeem their Loyalty points, they have no reason to accumulate a certain amount within a given time frame — meaning they are not particularly motivated to make additional purchases soon. That’s why we’ve implemented this feature, the main benefit of which is to involve customers in shopping! 
If you have a date when points expire, your customers will be motivated to come back and continue purchasing from you.  But if points don’t expire, consumers won't have an extrinsic motivation to shop with you again.

How to set a point expiration date in the Growave app?

Let’s go to the Dashboard, choose the Rewards app and set a points expiration time for your members:

Enable this function and choose the expiration time.

Please be informed about the next conditions:

  • If you have set 100 days and after 10 days changed the setting to 50? Then the countdown will continue from the initial activation of this setting.
  • If you have set 100 days, disabled the setting, and then reactivated it again, in this case, the countdown will start from the moment the setting was enabled again. 
  • The expiration date applies to a total amount of points and gets updated every time a customer completes a new activity on your store.

For example, if a customer earns X points, which are about to expire in X days, but one week later he leaves a review (i.e. completes an activity) and earns X more points, he will then have X points in total, which will be expired in another X days, as the expiration date got updated:

1) Customer John earned 1000 points on January 1, 2022.

2) Points Expiration is enabled and the expiration period is set for 365 days.

3) John’s 1000 points will expire on January 1, 2023

4) If John earns 100 points on December 31, 2022, his whole balance (1000 + 100 = 1100 points) will expire on December 31, 2023.

We would recommend you remind your customers about the expiration date. Here you can set the preferred period of time before expiration to your notification:

Pros and Cons of enabling points expiration

  • Encourages customers to come back to your store. Without points expiration, customers have no pressing need to earn and redeem points, which might limit the number of repeat purchases and sales overall.
  • Keep the brand on top of your customer's mind. Nobody likes losing, and this is exactly how expired points feel. To avoid this, customers will be more likely to remember your brand and their unused loyalty balance to keep participating in your membership program.
  • Easier program management. With an expiration policy, you can limit situations where customers with indecently high loyalty scores come into your store to claim dozens of free rewards in one go. Moreover, stagnant high balances make it difficult to differentiate active from dormant users.
  • Worsens customers’ experience. If your expiration policy is not well implemented, it might lead to your customers feeling cheated. Loyalty programs should be built with both parties’ interests in mind. Put yourself in their shoes for a moment. Imagine getting an email saying that if you don’t spend points in the next month your points will disappear. I bet that would piss you off a bit. 

How does the ‘Points Expiration’ work in Growave?

In Growave, we offer you to set up dynamic expiration for the whole points balance where points expire after a certain amount of time if they aren’t used or the customer didn’t earn more points.  
A dynamic expiration is one of the best ways to increase your purchase frequency with a loyalty program. This type of expiration allows you to motivate customers much more effectively. This is because they don’t view expiration as happening in the immediate future, they can continue to save points for bigger rewards (if they choose).
You can find more details in the following article.

Which period I should set up for points expiration?

Each company has a unique customer behavior which is important to consider in the points expiration period. 
1) First, you should find out your Purchase frequency:
Number of orders (365 days) / number of unique customers who made order (365 days) = AVERAGE PURCHASE FREQUENCY 
2) Now we can find out your Points' Expiration period. Here we can use ‘Time between purchases’. We want to set up point expiration so that customers who are considered dormant (haven’t purchased from you in a while) can be emailed telling them their points will expire.
365 days/Average Purchase frequency (during 365 days) = Time Between purchases 
This method takes your company sale cycles into account rather than just setting it. Maybe you sell furniture or household appliances that someone buys every 3-5 years. Having a point expiration of 6 months is not going to do you much good.

What you can do in Growave to ensure that your customers are aware of points' expiration date?

  • Mention the ‘Points expiration’ period and logic in FAQ
  • Enable notification about the points expiration date 
  • You can make double/triple notifications before points expiration using our integration with Klaviyo
  • Mention points expiration logic and rules in the Terms& Conditions doc 
In conclusion, should points expire or not? There are pros and cons to both sides of this question. Ultimately, it comes down to what your company wants to achieve with the loyalty program and your overall marketing strategy. If you're looking for better liability management and more control over your program, then expiration may be a good option for you. However, if you're concerned about breaking customer experience and putting people off from joining your rewards program, then maybe expiration isn't the best decision. The next step is to analyze what your competitors are doing and test different approaches.

That's it! Hope it was clear and interesting 🤗 If not, please contact us at support@growave.io or by chat icon in the bottom-right corner and we'll gladly help you with your requests and questions.