Loyalty Register glossary
Point value
The cash value of one loyalty point, usually stated in cents. It varies with how the point is used and who is measuring it.
Point value is the cash value of one loyalty point, usually stated in cents per point. It is not a single number: the same point can be worth different amounts depending on how it is used and who is measuring it. Tesco gives one clear example: 150 Clubcard points turn into £1.50 in vouchers, or one penny per point. (In trading, “point value” means something else, the money gained or lost per one-point move in a contract; this page covers loyalty points.)
Updated · By Loyalty Register Editorial TeamRelated terms
How do you calculate point value?
Divide the cash value of a reward by the points it costs. A hypothetical reward worth $20 that costs 2,000 points gives $20 / 2,000 = 1 cent per point. If cash is also paid, or taxes and fees apply, subtract them from the reward’s value first. For a whole program, use a weighted average of what members actually redeem for, not the best-value reward in the catalog, because members do not all choose the same option. Recalculate whenever the reward mix changes.
How much are my points worth?
Multiply the balance by the value per point. At 1 cent per point, 20,000 points are worth $200; at half a cent, $100. The published valuations on travel sites estimate this for airline and hotel currencies, but they are third-party judgments based on typical bookings, not the program’s own figure, and they move as award prices change.
Why does one point have several values?
Members see the value of the reward they choose. Sephora Beauty Insider members can redeem 500 points for $10 off a purchase, which works out to 2 cents per point, while Rouge members can redeem 2,500 points for a $100 Rouge Reward, or 4 cents per point. Finance values points at the expected cost per point of the rewards they will buy, which is usually lower than the retail value, to estimate the points liability. Partners that buy points pay a commercial rate. Each figure is correct for its purpose, so name the purpose whenever you quote one.
What lowers the value members actually get?
The rules around redemption. A minimum redemption keeps small balances unusable, expiry can remove points before they are used, blackout dates and limited availability restrict when points can be spent, and fees on awards reduce the net value. None of these change the headline value, but they reduce what members can realistically get.
How does point value fit with the earn rate?
The return a member gets is the earn rate multiplied by the point value. A program that awards 2 points per dollar at half a cent each returns the same 1% as one that awards 1 point per dollar at 1 cent. Set the two together, starting from the return you want to offer, and remember that changing the value of a point changes the value of every point already issued, which members notice as a devaluation.