Decisions · Layer 1
Should your loyalty membership be paid or free
Use paid membership when recurring benefits are valuable, distinctive, and reliably used. Use free membership when participation and broad reach are the objective.
Use paid membership when recurring benefits are valuable, distinctive, and reliably used. Use free membership when participation and broad reach are the objective.
## The decision boundary Paid membership exchanges a fee for defined benefits. Free membership exchanges participation or behaviour for a funded reward promise. The choice changes acquisition, retention, support, and liability.
## The options ### Free membership Choose this when reach and low-friction entry matter. The cost is additional operating complexity. ### Paid membership Choose this when benefits have recurring utility. The cost is more measurement and exception handling. ### Two-track membership Choose this when a free base can support a differentiated paid tier. The cost is a stronger funding and review obligation.
## What it costs you The currency is liability, margin, engineering time, operating capacity, or member trust. In a hypothetical illustration, 2 points per dollar on 400 dollars of spend creates 800 points. At a hypothetical 1 cent value, that is 8 dollars of liability. Ten comparable cases therefore represent 80 dollars of stated value.
## How to decide 1. Name the behaviour or obligation the rule must control. 2. Identify the independent evidence that proves the event. 3. Price the member, operating, and liability cost of each option. 4. Choose the least complex control that protects the least reversible outcome. 5. Set the evidence that would cause a later review.
## What breaks The failure mode is a rule that measures its own success. Keep source evidence, eligibility, issuance, adjustment, and fulfilment separately observable. Revisit the recommendation when the balance has no meaningful value or the event cannot be independently verified.