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Loyalty glossary: 53 terms for loyalty and rewards programs

Resources · Glossary

This loyalty glossary defines 53 terms used in loyalty and rewards programs, in one or two sentences each: program and tiers, points and finance, payments, coalitions, data and decisioning, technology and procurement. It's written for marketing, loyalty, finance, technology and procurement teams that design, run or select a points program.

Updated · 11 min read

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Key takeaways

  1. Points, liability and breakage are different concepts: a unit of value, an obligation and an estimate of unredeemed points.
  2. Expiration and breakage are not the same: one is a dated rule; the other, an estimate.
  3. A points program belongs to one brand; a coalition brings together companies that issue or accept the same currency.

Terms

The language of loyalty, grouped by topic.

Short, neutral definitions you can drop into a brief, an RFP or an internal deck. Pick a topic to see its terms.

TermDefinition
Loyalty programThe strategy and set of rules a company uses to reward repeat customers so they keep coming back. In Latin America it is also called fidelización or lealtad.
Points programA loyalty program in which customers earn points for purchases or actions and later redeem them for products, discounts or services.
Benefits clubThe usual name for a loyalty program in Argentina (club de beneficios); Chile says programa de beneficios and Mexico, programa de lealtad. It typically combines discounts, points and partner offers.
Rewards programA broad term for any program that gives a benefit in exchange for a behavior: points, cashback, coupons or gifts.
MemberA customer enrolled in the program, with their own account, balance and transaction history.
TiersProgram levels, such as Silver, Gold and Platinum, that members reach based on spend, frequency or other criteria, with increasing benefits.
MissionsChallenges with a specific goal, like buying three times in a month or trying a new category, that unlock a reward when completed.
GamificationUsing game mechanics (missions, badges, spin-the-wheel, scratch cards or leaderboards) to increase member engagement with the program.
PointThe program's unit of value. Members earn it through purchases or actions and spend it on redemptions; for the company, every issued and unredeemed point is an obligation.
Point valueWhat a point is worth at redemption. Illustrative example: if 1,000 points redeem for USD 10, each point is worth USD 0.01. It helps to separate value to the member from cost to the company.
Earn rateHow many points a member earns per unit spent, for example 1 point per USD 1. Together with point value, it sets how much the program gives back.
Redemption rateThe share of issued points that gets redeemed in a period. A low rate can signal an unappealing catalog or rewards that are hard to reach.
Points liabilityThe obligation a company records for points issued but not yet redeemed or expired, measured using point value and expected redemption.
BreakageThe share of issued points expected never to be redeemed, whether they expire or simply go unused. It is estimated from program history and affects how the liability is measured.
Batch-level expirationA rule under which each points credit (a batch) has its own issue and expiration date, instead of the whole balance expiring at once. Redemptions consume batches in a set order, such as FIFO or FEFO.
IFRS 15The international standard on revenue from contracts with customers. In loyalty, points granted with a sale are usually treated as a separate performance obligation: part of the revenue is deferred until the point is redeemed or expires.
Loyalty at the point of paymentA model in which the program benefit (points, a discount, cashback or paying with points) is decided and applied during the transaction and shows on the same receipt or checkout.
AuthorizationThe step in which the issuer or processor approves or declines a payment. It is the moment when a benefit can be applied before the purchase closes.
Payment processorA company or system that routes and processes card transactions between the merchant, the card network and the issuer.
POSPoint of sale: the checkout system in a physical store where the sale is recorded and payment is taken.
CheckoutThe final step of an ecommerce or app purchase, where the customer confirms the order and pays.
CashbackA cash refund of part of the purchase amount, credited to the customer's account, card or wallet.
Card-linked offers (CLO)Merchant-funded offers tied to a payment card: the cardholder activates the offer, pays with that card at a participating merchant and receives the reward later, once the transaction is matched and reconciled.
Split payment with pointsA purchase paid partly with points and partly with another payment method, such as a card or a digital wallet.
Coalition loyalty programA program shared by several companies, in which members earn and redeem the same currency, or exchangeable currencies, across all of them.
PartnerA company that joins a program or coalition to issue or accept points and rewards. Also called a participating merchant.
Points swapExchanging points from one program for points in another. It must be atomic: the debit in one program and the credit in the other happen together or not at all.
Exchange rate between programsHow many points in one program equal points in another during an exchange. Each program sets its own based on the value of its point.
Co-funded cashbackCashback whose cost is split between two parties, usually the card issuer and the merchant. Illustrative example: the bank pays 50% and the merchant pays the other 50%.
ClearingThe process of netting transactions between a brand and its partners (points issued and redeemed, campaign contributions) to determine what each party owes before payment.
ReconciliationChecking that the records of two parties or systems match, transaction by transaction; it happens between partners and between the program and accounting.
CDP (customer data platform)A system that unifies customer data from multiple sources into one profile, to analyze it and activate it in other channels.
Member profile (Member 360)A single view of a program member: identifiers, consents, tier, balance and the full history of purchases and redemptions.
Unified customer identityRecognizing the same person across every channel and brand of a company with one profile: what they buy in store, in ecommerce and in the app adds to the same history and the same balance.
AudienceA group of members defined by rules on their attributes or behavior, used to target campaigns, tiers and rewards.
Next best actionThe decision about what to offer or say to each customer next (a reward, a message or nothing) based on rules, history and context.
Transaction IntelligenceUsing the signals of a transaction in progress, together with the customer's context and program status, to decide and apply an action before the payment completes.
Real-time decisioningThe ability to choose an action at the moment an interaction happens, in milliseconds, instead of computing it later in batch.
JourneyA sequence of automated actions a customer follows based on their events; for example, a welcome message, a reminder and a reward if they don't buy again.
Double-entry ledgerA record in which every entry has a matching counter-entry: what leaves one account goes into another. Errors are fixed with offsetting entries, not by editing history.
APIA programming interface that lets two systems exchange data and operations; for example, a POS checking a member's balance.
WebhookAn automatic notification one system sends another when an event occurs, such as a redemption or a tier change, without the other having to poll for it.
MCP (Model Context Protocol)An open standard that lets AI agents connect to external systems and use their data and functions under defined permissions.
SDKA software development kit (libraries, components and samples) for integrating a platform into an app or site without coding every API call.
IdempotencyThe property that repeating the same operation, for example on a retry, produces a single effect: a resent redemption does not deduct points twice.
p95 latencyThe response time under which 95% of requests complete. It is the usual way to commit to speed for operations inside a payment.
RFIRequest for information: a request for general information to get to know the vendors in the market and build a shortlist.
RFPRequest for proposal: a request for a detailed proposal on how each vendor would deliver your program, with questions by area.
RFQRequest for quotation: a request for pricing from finalists, to compare costs and terms for solutions already evaluated.
TCOTotal cost of ownership: subscription or license, implementation, operations, infrastructure and support over the life of the contract.
SLAService level agreement: the contractual commitment on availability or response times, including how it is measured.
Migration with opening balancesMoving a program to a new platform by loading each member's balance as an opening balance, with a report that reconciles it against the previous system.
Parallel runA period in which the old and new systems run at the same time, to compare results before the final cutover.

With Qurable

These terms on the Qurable platform.

The glossary describes the category. Here is how some of these concepts show up in Qurable's loyalty and engagement platform.

  • Points program and tiers

    Points, tiers, missions, games and coupons, configured from the console.

    See the points program

  • Double-entry ledger

    Batches with their own expiration, FIFO, FEFO or LIFO consumption, and real-time liability by currency and country.

    See the points ledger

  • Loyalty at the point of payment

    Discounts, cashback and paying with points inside the authorization, in ~150 ms, at the POS, the processor or the checkout.

    Loyalty at the POS and checkout

  • Coalition

    Points exchange at each program's rate as an atomic operation, and clearing for each campaign from the Manager.

    See the loyalty coalition

FAQ

Terms people often mix up.

Six pairs of concepts that show up together in briefs, buying processes and budget meetings.

Mostly, yes. "Loyalty program" is the broad term for rewarding repeat business; "rewards program" puts the focus on what the customer gets. In Latin America the same idea goes by fidelización or lealtad, and program names vary by country: club de beneficios in Argentina, programa de beneficios in Chile and programa de lealtad in Mexico.

Points are a program currency: the brand sets their value, they are redeemed later, they can expire and they create a liability until used. Cashback returns money to the customer's account or card, with an explicit value from day one. In Qurable, the same brand can run points and cashback, each with its own rules.

It is a loyalty program that recognizes the customer and decides the reward within the payment authorization, instead of days later. The cashback, points or discount are applied in the same purchase. Qurable works this way with processors, issuers and wallets.

No. A points program belongs to a single brand, which issues the points and decides where they can be redeemed. A coalition brings together several companies that issue or accept the same currency, or currencies exchanged at a set rate. A coalition adds reach, but requires agreeing on values, contributions and reconciliation between partners.

No. Expiration is a rule: a point stops being valid on a date. Breakage is an estimate: the share of points expected never to be redeemed, whether through expiration or non-use, and it is used to measure the liability. This is not accounting advice; your accounting team and auditor define the treatment.

No; they solve different problems. A CDP unifies data from many sources to analyze it and activate it in other channels. A loyalty platform runs the program: rules, balances, tiers, redemptions and their accounting record. They can work together: Qurable provides the program's member profile and integrates with the CRM and marketing stack you already have.

First the RFI, to learn who can deliver your program; then the RFP, to see how each shortlisted vendor would handle your case; finally the RFQ, to compare total cost across finalists. A common mistake is asking for pricing in the RFI, before you know what you are comparing.

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Further reading

Guides that go deeper into the terms that matter most in an enterprise program.

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