Introduction
Setting the right point value is one of the most important steps in creating a loyalty program that both motivates customers and makes financial sense for your business. A well-balanced reward structure encourages repeat purchases, drives engagement, and builds lasting customer loyalty.
In this guide, we'll walk you through how to determine the value of your points, key factors to consider, and examples to help you get started.
🧮 What Does "Point Value" Mean?
Point value is the relationship between how many points a customer earns and what those points are worth when redeemed. It helps define:
How many points customers earn per dollar spent
How many points are needed to redeem a reward
Example:
If 100 points = $5 off, then 1 point is worth $0.05.
Note: Loloyal does not support decimal values for points. Please round to the nearest whole number when setting point values.
🧠 Key Factors to Consider
1. Your Average Order Value (AOV)
Understanding your AOV helps you create a points system that’s motivating but not overly costly.
Tip: If your AOV is $50, you might reward 5–10% back in points (e.g., $2.50–$5 worth of points per order).
2. Your Margins
The reward value should not outweigh your product profit.
Tip: If your profit margin is 40%, you might offer a 10% reward value—leaving room for profit after redemption.
3. Customer Behavior
What actions do you want to encourage?
Higher value purchases? Offer more points per dollar.
Repeat orders? Add bonus points for 2nd, 3rd, or subscription purchases.
Social engagement? Offer small point values for actions like follows or shares.
4. Competitor Benchmarking
Check out loyalty programs from similar brands to understand typical point-to-value ratios in your industry.
📊 Common Point Value Structures
Scenario | Points Earned | Redemption Value | Point Value |
$1 spent = 1 point | 100 points | $5 off | $0.05/point |
$1 spent = 5 points | 500 points | $5 off | $0.01/point |
$1 spent = 10 points | 1000 points | $10 off | $0.01/point |
🎯 Suggested Reward Ratios
Strategy | Suggested Ratio | Notes |
Standard Loyalty | 5–10% back | Balanced for most stores |
High-Margin Products | 10–15% back | Greater generosity can drive sales |
Low-Margin Products | 2–5% back | Lower cost, still engaging |
💡 Pro Tips
Keep it simple – Avoid overly complex point calculations
Set minimum redemption thresholds – e.g., 500 points = $5 off
Offer bonus points – For birthdays, reviews, or referrals
Communicate clearly – Help customers understand the value they’re earning
🔧 How to Set Point Value in Loloyal
Go to Program > Points
Click Add ways to earn or Add ways to redeem
Define how many points are earned or needed for each reward
Adjust as needed based on customer behavior and business performance
✅ Summary
Your point value is the foundation of your loyalty program. Make sure it aligns with your business goals, encourages the right customer actions, and delivers a rewarding experience that keeps them coming back.