Loyalty Points
Loyalty programs give members points for purchases or for other behavior.
Point Types
For each loyalty program, you create one or more loyalty currencies, called point types, and define point expiration rules. Use different point types to reward and recognize members based on their different activities, such as completing a flight or referring a friend to the program. Some point types could allow members to redeem points for a product or service, and others could track their behavior and grant rewards by assigning a new tier status. Point types allow for granular reporting on activities.
You can define eight point types, which can be used to track eight different types of member actions.
Multiple point types can also be used to differentiate the value of a purchase from the host company and from a partner. For example, an airline could say that in order to qualify for Silver tier status, a member has to earn either 25,000 points flying on the host airline or 35,000 points flying on partner airlines. In this example, points earned flying the host airline would be one point type, and points earned flying on partner airlines would be a second point type.
Programs can use loyalty point types to link specific actions more tightly with specific rewards. If a loyalty program tracks some member action, then you must create a specific point type for that action. For example, in the banking and credit card industry, you might create several different point types if you want to track how much your customers spend in several different areas, such as food, medicine, apparel, education, leisure, and travel.
A member may want to redeem a product, but has insufficient points to complete the redemption. Instead of the member forgoing the redemption, you can choose to allow negative points on the membership program. This facility is similar to a bank providing an overdraft facility on a customer's bank account. The next accrual activity pays back for the negative points. You can extend the negative points facility to members who have moved up to higher tiers of the program, or to all members of the program.
Point Subtypes
In addition to point types, you can also define point subtypes, which are used purely for administrative purposes.
For example, you might use different point subtypes to keep track of the different reasons that the points are given out. Points can be given out as an incentive with purchases or as a bonus, and you can create point subtypes named Incentive and Bonus to track these two different uses of points.
The point subtypes you create apply to all the available point types. For example, if you create point subtypes named Incentive and Bonus, then they can be used to track whether all your different Point Types are given out as an incentive or as a bonus.
When you define the point subtypes, you select one as the default that's given out if no subtype is specified when the promotion is defined.
At least one point sub type must exist for a program to get activated.
Point Items
A transaction debits or credits a member with points. Multiple promotions can give a member points as the result of a single transaction. When a member earns points from a transaction, a point item is created for each promotion's action that gives a member points. Thus, a single accrual transaction often results in multiple point items being created.
When a redemption transaction is processed, its use of points is mapped back to point items. It uses the available points from the point items that are closest to expiring. Since a redemption usually requires more points than were earned from a single transaction or point item, most transactions use the points from multiple point items.
All of the points associated with a single point item don't have to be used at once. For example, if a redemption requires 500 points and the point item closest to expiring has 1,000 points, then 500 of those points are used for the redemption. The remaining 500 points either are used by a later redemption or expire.
Qualifying Points
Qualifying points are points that count toward a member's tier status.
For example, a member who needs to qualify for the Silver tier might require 25,000 qualifying points. Other points, often called bonus points, can be used for redemption, but are non-qualifying and don't count toward a member's tier status.
A member's available points are the total points available for redemption, and include both qualifying and other points.
You can view how many qualifying points a member has on the member page. For details, see View a Member's Qualifying Points.
Members earn tier upgrades in real time. The Loyalty Batch Engine Main Job, when configured for the tier attribute, handles tier re-qualify or tier downgrades, using tier end dates. For details, see Overview of Batch Processing.
Qualifying points can't be redeemed or transferred. They are only deducted from a member's point balance when a transaction that assigns these qualifying points is canceled.
For information on how different tier assessment models use qualifying periods, tier start and end dates, and so on, see Types of Tier Assessment Models.
Point Roll-up to a Household
In any program, you can set up a Household type of member and roll-up, or accrue, qualifying points earned by the associated individual members to the household. This enables a family or other community to manage points and use them according to the needs of the group.
An individual member can belong to only one household, and all members of a household must be existing program members.
Individual members can control whether they belong to a household, and whether points earned accrue to the household at any given time. The household member can also specify an end date to cease an individual member's association.
Expiration of Points
Points that are given to members might or might not have an expiration date depending on how the points are defined. You define point expiration for the point type, and base it on one of the following:
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Member account activity
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A fixed period of time
If an accrual transaction is canceled, then the points that were given for that transaction are taken back from the member. Expired points can no longer be used, just as if the member had used them for a redemption award.
General point expiration is handled by the batch engine, which regularly monitors members' point expiration dates. If the expiration date is in the past, then the batch job expires the points and reduces the member's available point balance.
If an accrual transaction is canceled, then the points that were given for that transaction are taken back from the member.
Future Point Accrual
By default, points granted begin accruing on the transaction date. You can override this date and set an accrual date in the future. This is useful where you want to wait for travel to be taken before points accrue, or where products are returnable and you want to avoid redemptions against such purchases. For example, if a product has a 30-day return period, you might specify that the points accrue 31 days after the transaction date. For a flight purchase, you might want the points to accrue one day after the travel date.
This helps avoid fraud and helps manage point liability. By showing the points accrued as future points, the member can still receive instant gratification even though the points can't be redeemed immediately.
A member's available point balance excludes points that have a future accrual date. The lifetime point balance includes points with a future accrual date at the time the points are assigned.
A future accrual date applies only to non-qualifying points. The qualifying point balance doesn't depend on the future accrual date.
When setting up the promotion rule action, you can specify an accrual start date or create an attribute and date operation to calculate a future date.
CAUTION: Be sure to set the expiration date after the calculated accrual start date. If the accrual start date is later than the point expiration date, then any points granted in the promotion won't be available for the member to use.
If Oracle Loyalty receives an old transaction (from a partner, for example) where the return period is already over, then it sets the transaction processing date as the accrual start date.