Sequence for Loyalty Credit Check

The credit check sequence validates whether the member has a sufficient point balance to complete the redemption. If a member gets a loan because the member is in a tier, then the credit check process checks the extent of the maximum loan, and compares it with the redemption price to validate the member has a sufficient point balance. That is, the difference between the redemption price and the member’s existing point balance must be less than or equal to the maximum loan possible for the member’s tier and point type in which the selected redemption price option is quoted.

When calculating the eligible loan, the credit check sequence takes into account the member’s total outstanding loans. For example, consider the following:

• A member's point balance for a particular point type is 1000.

• The price in points to be paid for redemption is 1200.

• The loan limit for the member is 500, with the status of Approved.

• The member’s outstanding loan is 300.

The member is eligible to take a loan of 200 points (400 – 300). Because the points shortfall is 200 points (1200 – 1000), the member can proceed with the redemption.

The input parameters to the Credit Check business service are:

• Membership ID

• Redemption Price

• Point Type

The Credit Check sequence performs the following tasks:

1. Compares the point balance with the redemption price.

   Based on the membership ID and point type, the process retrieves the member’s point balance in the specified point type. It compare the Point Balance with the redemption price in the option selected by the member, to check whether member has sufficient point balance.

   For example:

   Point Type: FFP (Frequent Flyer Points) Point Balance: 1,000 Redemption price: 1,200 Output: Insufficient balance.

   If the balance is sufficient, then the business service calls Siebel Order Management to create a quote with the price option selected.

2. Checks whether a loan is applicable to the member’s tier.

   If the balance is insufficient, then the process retrieves the member’s tier and tier class, and refers to the Loyalty Program Administration screen, Loan setup to check whether a loan is applicable for the member’s tier in the given tier class, and the point type considered for redemption pricing.

   If the loan is applicable, then the process proceeds. If the loan is not applicable, then the process provides a message that the loan is not successful.

3. After verifying that the loan is applicable, the process derives the shortfall by calculating the difference between the redemption price in points and the member’s current point balance.

   For example:

   Redemption Price: 1,200 points Point Balance: 1,000 points Shortfall: 200 points

4. Assesses the extent of the loan.

   For example, the loan of Frequent Flyer Points is by tier and by percent of balance. The calculation is as follows:

   Members FFP balance: 1,000 points Member’s primary tier: Gold Percentage of Point Balance in Point Type Miles: 40% The loyalty program can provide a maximum loan of 400 points to the member.

5. Derives the value to be compared with the shortfall by comparing the value derived based on percentage of point balance with an absolute value.

   For example: Basis: maximum. Extent of Loan based on Percentage of Point Balance: 400 points Extent of Loan based on Absolute Value: 500 points Maximum of the two: 500 points.

6. Checks whether the loan is sufficient.

   The process compares the maximum applicable loan derived in step 5 with the points shortfall stored in step 3. The shortfall must to be less than or equal to the maximum loan limit for the credit check to be successful.

   For example: Shortfall: 200 Maximum loan limit: 500

   As the shortfall is less than the maximum loan limit, the Credit Check output is: Successful.

7. Creates a loan accrual.

8. Because the credit check is successful, Loyalty business service automatically creates a loan transaction. That is, it accrues the shortfall in points to the member’s account, and successfully creates the redemption transaction. The business service calls Siebel Order Management to create a quotation.