Decisions · Program mechanics and currency
Should your points expire, and on what trigger
Most programs should expire points, and the trigger should be inactivity, never a fixed date of issue. Activity-based expiry caps the liability tail while touching only members who have already left. Hard expiry confiscates from engaged savers. Skip expiry entirely where the currency is denominated in cash, because forfeiting money invites regulatory trouble.
Most programs should expire points, and the trigger should be inactivity rather than the date of issue. The one exception worth building policy around is cash-denominated currency: voiding a balance a member reads as money is forfeiture, and belongs to a lawyer before it belongs to a program designer.
## Expiry exists to close the liability tail
Points liability is a promise with no maturity date unless you give it one. Without expiry, the unredeemed residue stays on the balance sheet indefinitely, shrinking only through a breakage estimate that an auditor can always challenge. With an expiry rule the residue resolves on a schedule, because every balance has a date after which the obligation lawfully ends. That is the honest reason most expiry policies exist, and it is a legitimate one. The mistake is dressing it up as an engagement mechanic and then designing it as if that were true.
## The trigger decides who loses
Hard expiry, a fixed life from the date of earning, hits everyone, including a member saving deliberately toward a large redemption while transacting every week. Activity-based expiry touches only accounts with no qualifying transaction for the whole window, which means the people it affects have already stopped participating. The first design takes value from your best savers. The second harvests balances the member has abandoned. There is no engagement scenario in which the first is the better choice, and programs running it usually inherited it rather than chose it.
## Warned members generate activity, but rarely the kind you wanted
An expiry warning does move people. The movement is defensive: a minimal transaction to reset the clock, or a reluctant redemption to salvage the balance, neither of which resembles the incremental purchasing the policy was defended with. Count reactivation caused by expiry warnings as recovered custom only after the member transacts a second time with no threat attached.
## The numbers, worked once
A program has 100 million points outstanding at a 1 cent redemption value, a liability of 1 million dollars. Historical redemption runs at 70 percent, so around 300,000 dollars of that obligation will probably never be claimed. With no expiry rule, the 300,000 can leave the balance sheet only through a forecast that must be re-argued at every audit. With a 24-month inactivity trigger it converts itself: each year, the balances of members who lapsed two years earlier expire, and the release becomes an observed event instead of an assumption. Same members, same behaviour, an entirely different quality of number.
## Where the recommendation reverses
Cash back and any balance displayed in currency units sit in a different legal category from points in several jurisdictions, and where that line falls is genuinely unsettled. We cannot state a jurisdiction-by-jurisdiction rule here, and most operators cannot either, which is one reason cash-like programs so often carry no expiry at all. Positioning creates the second reversal: a program that markets its currency as savings has promised durability, and an expiry policy contradicts the pitch in a way members will eventually notice.
## What breaks
A trigger sized to hit a liability target gets discovered, usually by a forum thread or a journalist, and the trust cost lands on precisely the members whose future revenue was the program's point. High-balance members read a harsh policy as a warning about everything else you might do. If the rule cannot be explained to a member's face as fair, change it before someone else explains it to them.