Loyalty Points: How to Create Variety in Reward Point Redemption


Creating a loyalty program is a full process from challenges to gain points, through level achievements, and finally to redeeming the points gained. Redemption, or redeeming points, is the tangible part of your program that satisfies your customer.

The reward redemption process should be a smooth one to ensure customer satisfaction and accordingly build retention.

Gameball offers several redemption options that make your loyalty program a smooth experience for both your brand and your loyal customers.

What is a Loyalty Point? 

If your program is point-based, meaning your customers accumulate points then redeem them in several forms, this article will help you formulate ways to better point the redemption rate of your program. 

Points are the currency your customers buy rewards with. No points are equal, because you set your point’s value.

Further reading: Your Complete Guide to the Types of Loyalty Programs

When setting up your point redemption scheme, imagine what would appeal to your customer and pursue that. Depending on your customer base, you can set the margin for rewards.

Rewards are redeemable in many forms such as cashback rewards, redemption at check out, exchange points for gifts, and so on. 

It is important to make clear and visual to your customers what your point redemption value is. It’s as simple as saying 10 points equal 1 dollar to be spent. The clarity will set in the minds of your customers that the more they spend the more they earn. 

Remember if your points are too hard to attain it will demotivate your customer to attempt to collect those points.

What Are the Benefits of Letting Your Customer Collect Points?

Do not underestimate the power of your loyalty program, as it reinforces positive consumer behavior and that will reflect directly onto your sales funnel and on your retention numbers. 

Overall, it’s a win-win situation for your customers. Customers buy the product they need/want and also get rewarded for their purchase.

Positive reinforcement will spark as you give your customers’ points to redeem later in a form of a gift. In simple wording, positive reinforcement provokes consistent behavior patterns.

You get a point for every purchase or action you make. This is how the human brain is wired, so your customers will do an action to earn the 50 points you promise to reward. 

In conclusion to the psychological side of customer engagement, offering redeemable points will motivate your customers to engage, reward valuable and profitable actions, and initiate long-term commitment (loyalty). 

A well-structured redemption will assist customer motivation and aid customer loyalty. 

Points Expiry

The optimum time for point expiry is 24 months. If your points linger for longer than one whole year then your customers may lose interest in the brand or even forget about these points.

If your points expire and are no longer valid to be redeemable, it is very important to promote point expiry extension. 

If your customer’s points have expired, you could offer that they exchange the expired points with a free shipment. This will allow your customers to see how rewarding these points are, plus who wouldn’t appreciate free shipping!

Another method that is well adopted by many, is to set a date for point expiry. You can send notifications to remind customers of point expiry.

This is an example on point expiry notification

Ways to Redeem Points

What Does It Mean That Your Points Are Redeemable?

It simply means that you allow your customer to exchange their points with the rewards that you offer. This means your customers will accumulate points and will be encouraged to continue to shop from you to get more points, this way they keep coming for more from your store rather than going to a competitor store and losing the chance of gaining the points.

It’s important to note that as your customers continue to collect points, you collect data behavior that will eventually help you generate more personalized rewards. 

Closed-loop vs. Open-loop

In order for the redemption process to take place, there are only two ways; a closed-loop and an open-loop. Each loop requires different configurations and with Gameball you can configure both options into your Redemption program.

Difference between the concept of redeeming points in a closed-loop (left) and an open-loop (right)


Closed Loop is direct redemption without third party management. The closed-loop is what you offer within your platform without restriction to one business group. So, you can only redeem whatever points you have gained within the merchant you have accumulated your points at. 

With Gameball, you can choose any or all of the following reward options for redeemable rewards. You can configure these options through the Gameball dashboard. 

This means that your players get to redeem directly from your platform. As such, when they are checking out, they can create a coupon discount code by transferring their points to other parties to run the redemption.


Essentially, in the context of redemption, Open-loop allows your customers to redeem from places other than where they collected the points from initially.

In simple wording, the open-loop allows customers to redeem rewards across different channels other than the origin of the points. Investing in the open-loop can take you a long way, you will surely find a return on customer loyalty investment.

Unlike the closed-loop, the open-loop offers more versatility. Heads up that if you were to use open-loop rewards you must use a loyalty system that provides API integrations (this is not applicable on all platforms). This will allow you to let customers avail their points at your partners’ online and retails stores.

We at Gameball provide a wide range of APIs to enable the best open-loop experience with a wide range of SDKs for easier integration.

Types of Rewards to Offer

With Gameball you can offer several redemption options through your program. As you set up redemption, choose from what Gameball has to offer. You can choose from some of the following: coupons, percentage discounts, free shipping, and free product.

Fixed Rate Coupons

The flat-rate coupon is the conversion rate of points. So, if the customer accumulated 10 points it equals one point, this means the flat rate is 1 Point = 0.01. Customers can choose how many points they want to redeem and not necessarily all of the points at once. 


With Gameball, you can customize the percentage discount you want, and offer to redeem in the form of a discount at check out.

This type of redemption is doable only through WordPress and Shopify, with setting up a few configurations.

The percentage will be calculated at checkout in exchange for a certain number of points. For example, customers can exchange 100 points with a 5% discount.

The percentage can be used to generate coupons, which have been an ever-growing retail tactic to lure customers. Unlike offers, that tend to offer short term spikes in sales and loss of profit later, percentage discounts rewarded steadily will increase customer retention.

Free Shipping

Free shipping is simple. Dedicate a number of points to let customers eligible for it. So, you can configure 500 points for shipping.

It’s also a plus amid this global pandemic, we all, more than ever appreciated the free shipping. 

Free Product

Redeem a free product in return of a certain number of points unique to each product. Choose a range of free products to give choice for your customers, this will make customers feel empowered and treat them to a vendor choice. 

If you are in the cosmetic field it would be an awarding incentive to give free products as a redeemable award. This holds high value for customers since they get the chance to try new products in the ever-changing industry.

It will also help them decide whether or not to invest in the new product. In addition, it’s a very efficient tactic, since a small product of makeup holds significant value for customers. 

Create a Custom Redemption Page

For a more advanced way of providing APIs in the loyalty system, you can create a page on your online website/app that offers different products and services and uses these APIs to display to your customers direct redemption on that page.

As you can see in the following example, the currency is the points. So, to buy the product you must redeem the displayed number of points directly without the need to convert your points.

Take for example if you had 10,000 points and you want to redeem Airpods that were also worth 10,000 points you will click on the item as if you were purchasing it and directly redeem your reward. 

An example of what a customized product redemption page can look like

Benefits for Merchant by Availing Different Types of Rewards

As a merchant, you can make use of products with lower margins and free shipping to decrease the rewards expenses.

There’s a whole world of how gains can alter people’s behavior to do more. Rewards have played a significant role in altering consumer behavior. One way to trigger consumer satisfaction is by offering them choices in their redemption.

Your program’s redemption rates indicate the ease of use and value of your rewards. So, the perception of your reward’s importance reflects on the redemption rates. 

The simplicity of your redemption program means it does not require your customers to have mathematical skills to redeem their points, it means it’s a simple transaction. 

Example of Good Point Redemption

This example is an excellent one because it exemplifies a variety of point redemption. American Express Platinum Card is a good example of point redemption in how they present an open-loop point redemption. 

Platinum Card from American Express, explaining how to redeem

Platinum Card offers plenty of ways to redeem points accumulated by American express vendors. 

  • Pay with points at checkout
  • Redeem for Gift Cards
  • Cover card charges
  • Book or upgrade travel
  • Transfer points 

As Platinum offers several options for redemption, it makes the action a joyous experience, where customers feel entitled to choose the reward they deserve. It is a closed-loop redemption type because it reaches out to different vendors to complete the redemption process. Nonetheless, some of the redeemable points are within an open loop, such as the pay at checkout (because it requires no third party). 

Please note that the checkout payment method will require you to use Gameball APIs and this is not applicable on all platforms. 

What you can take away from this example is that American Express has heavily invested in its redemption process. 

Be careful with offering too many choices you can end up overwhelming your customer and paralyzing the ease of the process. 

We mentioned the many ways you can make your program suitable for all. Now you can have a look at indications to help you decide what kind of redemption to offer. Ensure that your rewards reflect what your customers want. You can do so by listening to your customers’ feedback. And enhancing their experience. It’s a win-win situation because you ensure a high level of customer point redemption rate. 

Listening to your customers will improve the whole customer experience and not just your redemption rates. Remember what works for your program today might need some tweaks to stay on top of the game. 

Redemption Explanatory Page

To finish off your redemption, customers need some sort of guide to clarify and confirm the redemption process. 

Create an explanatory page for point redemption and ensure your overall redemption experience ticks the following:

  1. Offer seamless redemption 
  2. Keep it simple
  3. Allow personalization in rewards
  4. Build and explanatory page on point redemption
Nintendo has built a good explanatory model
Did you know that your redemption rates help you estimate customer satisfaction levels and determine purchase behavior? Let us know in the comments.
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