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Reward Points Program (cashback) - Best way to implement?

5:08 am on Aug 21, 2012 (gmt 0)

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We are starting a reward points program on our site which has the following rules:

- Customers can earn 10% cashback on their purchases in the form of reward points. if they buy $100 worth of products they get $10 in the reward points that they can redeem upon checkout.

- We have limited this so that the cashback they receive can only be redeemed in increments of $5 off per $50 spent. So if they are buying $110 worth of products they can apply up to $10 off in reward points if they have enough.

- If they try to use a coupon code or additional discount they cannot redeem these rewards

- Rewards have an expiration of 2 years

Do you guys think this is a fair program? The main point i am concerned about is putting a limit on the redemption that they have to spend a certain amount to redeem ($5 off for every $50 spent). I want to avoid customers who get upset about this.

We used to have a rewards program where they didnt have to spend a minimum, but customers ended up just using their points on purchases and I had to take a loss on shipping and fulfillment costs.
4:31 am on Sept 12, 2012 (gmt 0)

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joined:July 30, 2010
votes: 0

I am thinking of doing a similar program except that I am not having limits because I think that's annoying, and the point of the program is to build loyalty and give people a reason to shop more.

I figure 10% isn't that much, and if someone has spent enough with me to have a large amount of points, then that's great. However, that could be short sighted.

So I am interested in how things worked for you when you didn't have a minimum. Can you tell me more?

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