✨  Don't miss out! Register for our Employee Appreciation Webinar scheduled for 29th February.🎖️
✨  Don't miss out! Register for our Employee Appreciation Webinar scheduled for 29th February.🎖️

Register now

Live Webinar: Secrets to Building a Successful B2B2C Growth Flywheel
Save your spot now

The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

Visit Hr Glossaries

Reward Points

Reward points have become ubiquitous in retail, hospitality, finance, and various other sectors, offering a mutually beneficial avenue for both consumers and businesses. But what exactly are reward points, and why do they matter?

What are reward points?

Reward points are a form of incentive offered by businesses to encourage customer loyalty. Customers earn these points by making purchases or engaging in specified activities, such as signing up for a membership, referring friends, or participating in promotions.

Accumulated points can typically be redeemed for discounts, free products, gift cards, or other benefits offered by the business.

Listen, recognize, award, and retain your employees with our Employee engagement software  

What are the benefits of using reward points?

Using reward points can offer several benefits to customers.

  • Firstly, they can save money by redeeming points for discounts or free products.
  • Secondly, reward points programs can enhance the overall shopping experience by providing incentives for continued engagement with the brand.
  • Additionally, these programs often offer exclusive perks, such as early access to sales or special events, to loyal customers.

What are some common types of reward points programs?

There are various types of reward points programs offered by businesses. Some common examples include:

  • Points-based programs: Customers earn points for every purchase, which can be redeemed for discounts or free items.
  • Tiered programs: Customers progress through different membership tiers based on their level of engagement or spending, unlocking increasingly valuable rewards as they advance.
  • Co-branded credit card programs: Customers earn points by using a co-branded credit card for purchases, with points redeemable for rewards offered by both the credit card issuer and the partner business.

How do reward points programs work?

Reward points programs typically involve customers signing up for a membership or loyalty program with a business. Once enrolled, customers earn points through various activities, such as making purchases, completing surveys, or interacting with the brand on social media.

These points are then accumulated in the customer's account and can be redeemed for rewards according to the program's terms and conditions.

How do businesses benefit from reward points programs?

Businesses benefit from reward points programs in several ways:

  • Customer loyalty: Reward points programs incentivize customers to make repeat purchases in order to accumulate points. This builds customer loyalty as individuals are more likely to return to a business where they can earn rewards.
  • Increased sales: Customers may spend more in order to earn points or reach a certain threshold for rewards. This can lead to increased sales volume and higher revenue for the business.
  • Data collection and customer insights: Reward programs often require customers to sign up, providing the business with valuable data such as demographics, purchasing behavior, and preferences. This data can be used to tailor marketing efforts and improve product offerings.
  • Word-of-mouth marketing: Satisfied customers who benefit from reward programs are likely to spread positive word-of-mouth about the business, attracting new customers and further enhancing loyalty among existing ones.
  • Competitive advantage: Offering a reward points program can differentiate a business from its competitors and attract customers who value loyalty rewards.
  • Inventory management: Businesses can use data from reward programs to better forecast demand and manage inventory, ensuring they have the right products in stock to meet customer demand.
  • Cross-selling and upselling opportunities: Reward programs can be used to promote related products or encourage customers to upgrade to higher-priced items in order to earn more points.
  • Feedback mechanism: Reward programs provide a platform for customers to provide feedback, which can be invaluable for businesses looking to improve their products and services.

Can reward points expire?

Yes, reward points can expire based on the policies set by the business. Some businesses may impose expiration dates on points to encourage customers to redeem them within a certain timeframe. It's important for customers to be aware of the expiration policy to make the most of their accumulated points.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

Can reward points be transferred or gifted to others?

In some cases, businesses may allow customers to transfer or gift their reward points to others. However, this feature is not universal and is subject to the terms and conditions of the specific loyalty program. Customers should review the program rules to determine if point transfers are permitted.

Do reward points have monetary value?

Reward points can have monetary value depending on how they are redeemed. For example, if a customer can redeem 100 points for a $10 discount, each point would have a value of $0.10. However, the actual value of reward points can vary based on the redemption options available and any restrictions imposed by the business.

Quick Links

Employee Engagement solutions

Recognised by market experts