Loyalty Register glossary
Rounding rule
The rule that decides what a program does with fractions of points when earning, converting, transferring or reversing points.
A rounding rule decides what a loyalty program does with fractions of points. When an earn rate produces part of a point, for example 4.5 points on a $3 purchase at 1.5 points per dollar, the rule says whether the member gets 4 points, 5 points, or 4.5 with the fraction kept for later. Rounding rules also apply to conversions, transfers and refunds.
Updated · By Loyalty Register Editorial TeamRelated terms
Where do rounding rules apply?
In earning, fractions come from multipliers, percentage bonuses and spend that is not a whole dollar. In conversions and transfers, they come from ratios that do not divide evenly. In returns, the program has to decide how many points to remove when part of an order is refunded. In mixed payment, points have to be converted into cents at checkout. Each step needs a rule, and the rules should be consistent across channels.
Why does a small rule matter?
Because it applies to every transaction. In a hypothetical program where a member makes 20 purchases a month that each produce half a point, rounding down removes 10 points a month without any change to the advertised earn rate. Across millions of transactions, the choice between rounding down, rounding to the nearest point and keeping fractions makes a measurable difference to the points liability, and to how fair the program looks to members who check the math.
What are the usual options?
Rounding down on each transaction is simple and slightly favors the program. Rounding to the nearest whole point stays closer to the advertised rate on average. Calculating on the whole order rather than on each item reduces rounding loss. Keeping fractions in the ledger and showing members whole points is the most accurate, but it needs a ledger that supports decimals. Whatever the choice, apply it the same way when points are reversed, or returns can leave members with more or fewer points than they started with.
What should you check?
Write the rule into the program terms and the technical specification, and test it on refunds, partial returns, split payments and transfers. Make sure the point-of-sale, ecommerce and app channels round the same way, or members will see different points for the same purchase. If you migrate to a new platform, confirm it applies the same rule, because a change in rounding can look to members like a change in the earn rate.