Loyalty Register glossary
Points bank
A member's running balance of loyalty points, with the record of every point added and removed.
A points bank is a member’s running balance of loyalty points, together with the record of every point added and removed. Programs use different names for it. Sephora, for example, talks about the Beauty Bank, from which members redeem points for rewards, and requires at least 500 points in a member’s point bank to redeem for $10 off.
Updated · By Loyalty Register Editorial TeamRelated terms
What goes into and out of a points bank?
Points come in from purchases, bonuses, promotions, partner activity and manual adjustments. They go out through redemptions, expiry, forfeiture, transfers, and reversals when a purchase is returned. Each movement should carry a date, a source and a reason, so the member can see what happened and the program can reconcile every balance with its points ledger.
Is the balance the member’s property?
Usually not in the way a bank deposit is. Program terms generally describe it as a balance the member can use under the program’s rules, and the program can change rewards and expiry rules with notice. That is why the word “bank” deserves care: members tend to read it as savings. Changes to how the balance works should be communicated as carefully as changes to a financial product, and checked with counsel where consumer protection rules apply.
How does it relate to the points liability?
The sum of all members’ banks, adjusted for expected breakage and the cost of rewards, is the basis of the points liability. If banks grow much faster than redemptions, the liability builds up. Expiry rules limit how long inactive balances stay on the books: Sephora’s points, for instance, expire after 12 months or more without a purchase or a redemption.
What should you watch?
Look at the distribution of balances, not just the total. How many members hold enough for a reward and have not redeemed, and how old are those balances? Show members a clear history of their bank, the date any points will expire and how far they are from the next reward. A hypothetical program where a fifth of members hold balances above the first reward level but have not redeemed in a year has both a growing liability and a group of members who may be drifting away.