How should I set the points earning rate?

Pick a rate that is easy to understand and sustainable. One point per unit of currency spent is the clearest, but the redemption value matters more than the number: if 100 points buys a free coffee on roughly 100 currency of spend, your reward is about a 1% rebate. Model the redemption cost as a percentage of revenue before committing.

Do I need membership tiers?

Tiers are optional but powerful. They give frequent customers a status to climb toward and a reason to consolidate spend with you. Keep them simple — two or three tiers with thresholds that a regular customer can realistically reach, each unlocking a perk that costs you little but feels meaningful.

Should loyalty points expire?

Many programs expire points after 12 months of account inactivity, which limits your liability and nudges dormant members back. Some regions restrict aggressive expiry of paid-for points, so expire only on inactivity rather than a hard clock, and state the rule plainly. Set expiry to never if you would rather maximise goodwill.

Are loyalty points a legal liability?

Issued points are a deferred liability on your books — you owe the reward when they redeem. That is why earning rate, redemption value, and expiry all need deliberate terms. Reserve the right to adjust the program with notice, and give members a redemption window if you ever wind it down.

Can I change the program after launch?

Yes, if your terms reserve that right and you give reasonable notice. The generated terms include clauses letting you change earning rates, rewards, and tiers, and to end the program with 30 days' notice during which members can still redeem. Never retroactively void points members have already earned without notice.

What is the Loyalty Program Terms & Rules Builder?

Create loyalty program documentation with program name, points earning rate, membership tiers, redemption catalog, expiry rules, and standard participation terms. Exports clean Markdown ready to publish as your program's terms and conditions. It runs free in your browser on Gera Tools, with nothing uploaded.

Loyalty Program Terms & Rules Builder

Name: Loyalty Program Terms & Rules Builder
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

Turn a rewards idea into publishable program terms

A loyalty program is a promise with money attached: every point you issue is a reward you owe later. Running one without clear written rules invites disputes, surprise liabilities, and customers who feel cheated when a reward changes. This builder turns your program design — earning rate, tiers, redemption catalog, and expiry — into a clean, consistent terms-and-conditions document you can publish and stand behind.

How it works

You define the economics and the tool assembles them into standard program terms:

Earning   — X points per unit of currency spent
Tiers     — status levels with point thresholds and perks
Redemption — point cost mapped to each reward
Expiry    — points lapse after N months of inactivity (or never)
General   — eligibility, non-transferability, change & wind-down rights

The earning rate, tier thresholds, and redemption costs together define your effective rebate: if a customer earns 100 points on 100 of spend and redeems 100 points for a reward that costs you 1, you are running roughly a 1% loyalty discount. The tool writes the rules; you control the numbers, so model the redemption cost as a share of revenue before you publish.

Designing the economics before you write the rules

The biggest mistake small businesses make with loyalty programs is designing the rules before the numbers. Before you fill in any field, answer two questions:

What is my redemption cost as a percentage of revenue? If a customer earns 1 point per pound spent and 100 points buys a £5 reward, you are running a 5% discount program — comparable to always offering a 5% coupon. Know this number before you launch.
What behaviour am I rewarding? Frequent visits, high spend per visit, referrals, or reviews all warrant different earning structures. Points purely on spend reward big spenders; visit-based programs reward frequency regardless of basket size.

Tiers: who they help and when to skip them

Tiers work best when you have a recognizable spectrum of customers — from occasional visitors to loyal regulars — and want to give your best customers visible status. A café with one visit per week does not need Bronze/Silver/Gold tiers. A professional services firm with clients spending from hundreds to tens of thousands benefits significantly from a tiered approach that delivers concierge perks to the top tier.

A reasonable tier structure for most small businesses:

Tier	Annual points	Perk example
Standard	0–499	Birthday bonus points
Silver	500–1,499	Free delivery, priority support
Gold	1,500+	Dedicated account contact, exclusive events

Keep thresholds attainable for your real customer base — a threshold that requires triple the spend of a typical loyal customer is demoralizing rather than motivating.

What the generated terms include

The output Markdown covers: program name and operator, eligibility (age, geography), how points are earned, the tier structure, the redemption catalog, expiry policy, non-transferability of points, liability cap, and the right to modify or close the program with reasonable notice. These are the standard clauses that protect both members and the business. Copy the output into your website’s terms page, into your app’s help section, or into a PDF you email at signup.

Tips and example

Keep the point name and earning rate dead simple — one point per unit spent is the easiest mental model. Use two or three tiers with thresholds a regular customer can actually reach, and attach perks that feel generous but cost little, like early access or a birthday treat. Expire points on inactivity rather than a fixed date to stay member-friendly and reduce liability. Always keep the clauses that let you adjust the program with notice and wind it down with a redemption window: those are what protect you when the economics need to change.