Loyalty glossary · 11. Legal and compliance (15)
Program Terms And Conditions
Programme terms and conditions are the binding operator-written rules that govern accrual, qualification, redemption, and unilateral changes to a loyalty programme. They define who earns, how activity counts toward status, and when an operator can expire points or strip a tier without the member's consent.
Programme terms and conditions form the contract between an operator and its members, and the operator drafts every line alone. They are not a neutral description of how the programme works, they are a list of powers the operator grants itself. Most members accept them without reading a single clause.
Accrual depends almost entirely on these clauses. They set the earn rate, list which purchases qualify, and cap how many points a member can accumulate. Many contracts include a term allowing the company to change the rate with little notice, so the printed rate is a starting offer rather than a guarantee.
Activity-based qualification is a separate lever. A hotel programme may advertise elite tier after 20 nights, but the fine print decides what counts as a night, whether award bookings qualify, and when the operator can reject activity it considers ineligible. The resulting tier is harder to reach than the marketing suggests.
Active-member rate looks like a health metric, yet the contract defines what active means. A customer who logs in once every 12 months might be active in advertising, while the clauses require a stay or a purchase within 90 days. The company can then cite a low active-member rate as proof that devaluation is needed, when its own definitions produced the figure.
Take a customer who spends 10,000 dollars under terms granting 2 points per dollar, accruing 20,000 points. A unilateral change to 1 point per dollar, permitted by the very clause the customer accepted, halves that accrual to 10,000 points on identical spend.
There is no symmetry in these documents. The operator can change the rules with 30 days notice, while the member cannot exit without forfeiting accumulated value. The asymmetry is deliberate, and it makes programme terms and conditions the least read but most consequential part of any loyalty programme.