Loyalty glossary · Currency and economics
Points expiry
Points expiry is a rule that voids a member's accumulated balance after a defined period, either from the date of issue or from the date of last account activity.
Two mechanisms get called the same thing and behave very differently. Hard expiry voids points a fixed period after they were earned. Activity-based expiry voids the whole balance after a period of inactivity, and resets that clock on any qualifying transaction. The second is far more common and far more defensible, because a member who is still engaging never loses anything.
Expiry is almost always defended in engagement language: it encourages members to come back, it keeps the programme active, it prevents balances from going stale. Sometimes that is true. More often the decision was made in the finance conversation, because expiry is the single most effective lever on the liability sitting on the balance sheet, and the engagement argument was assembled afterward.
The cost is paid in trust, and it is paid later. Members model your future behaviour from your past behaviour, so introducing or shortening expiry teaches them that the currency is unreliable. That lesson generalises, and it lands hardest on the high-balance members who had the most reason to stay.
If you introduce it, the notice period is the whole decision. Regulators in several markets have taken an interest in short or poorly communicated expiry terms, and members treat a surprise expiration as a broken promise rather than as a policy they failed to read.
Take a policy of 24 months of inactivity with 90 days of notice, to make the mechanics concrete. A member who transacts in month 23 resets the clock and loses nothing. A member who goes quiet at month 12 gets a warning at month 21 and loses the balance at 24. The same policy is invisible to one member and confiscatory to the other, and the only difference between them is a transaction neither thought of as a deadline.
Hard expiry behaves differently: points earned in January 2026 die in January 2028 regardless of activity, so an engaged member still loses balances they were saving deliberately.