Points Economy Introduction

The SessionM Platform features robust points economy management capabilities as part of the loyalty offering, as the points economy configuration is a foundational step for any point based loyalty program. The SessionM Platform is designed to allow complete flexibility and configurability based on each client’s specific needs.

As part of initial client onboarding, the SessionM integration team will assess the client’s points economy requirements to configure the loyalty program’s economy. With the release of the Point Management and Incentives Domain, SessionM is exposing the points economy setup and configuration into the SMP interface.

Elements of a Points Economy

At the foundation of every points economy are the configuration of the three fundamental building blocks or levels:

Economy Level – Defines basic economy attributes like type of physical currency (USD, Euro, etc.) and point value conversion.

Point Source Level – All points originate in a point source and are distributed from the point sources into various point accounts. Having multiple point sources allows for distinct point source ledgers enabling clients to run partner-based promotional programs with a reconcilable audit trail that accounts for every single point.

Customer Point Account Level – Defines the various accounts that points are awarded into at the customer level. Point accounts can vary in purpose including spendable points, tier qualifying points, etc. The sum of all similarly classified accounts represents the customer’s total point balance for that classification. Having multiple point accounts allows for various point classifications (spendable, tier qualifying, etc.) and also different expiration rules at the account level.

Economy Example — Koalla Clothing

The simplest way to review the points economy functions within the SessionM Platform is via example. As such, we will step through a common configuration for sample retail brand, “Koalla Clothing.”

Economy Level – Koalla Clothing has a USD based points economy with a core underlying loyalty rule awarding customers 1 loyalty point for every $1 that they spend. Points are spent in the order they are earned across accounts.

Point Source Level – Along with the default/core point source, Koalla customers can receive points from a variety of additional sources, including:

  • Credit Card – Koalla has a branded credit card that awards an additional 2 points for every dollar spent when the card is used.
  • Partnerships – Koalla has a partnership with a ride sharing company that awards registered Koalla customers 100 ponts per ride.

Customer Point Account Level – Koalla has established separate spending rules and expiration dates for different types of points. For example, default/core points expire in 180 days, while credit card points expire in 365 days.

In the sections below, this document goes into further detail (including examples) of each building block that makes up a custom points economy.

Economy Overview

The economy level configurations are critical to the entire platform and impact every transaction and event that passes into the platform. The economy level consists of a number of different foundational attributes, along with establishing the point redemption policy.

Economy Attributes

The points economy is configured by defining the following key attributes:

Default Point Source – When configuring point earning outcomes, this is the default point source the points are awarded from (view Point Source Level Overview below for more information). This can be changed when additional point sources are configured.

Default Point Account – When configuring point earning outcomes, this is the default point account the points are awarded into (view Point Accounts Level Overview below for more information). This can be changed when additional point accounts are configured.

Point Redemption Policy

The Point Redemption Policy is defined at the points economy level. This policy defines the logic by which points are burned from various point accounts across the economy. When setting up the economy, one of the following redemption policies is required:

Stack Rank Policy (default) – Points are redeemed by the highest ranked point account first until that source is depleted, thereby moving down to the next-highest ranked point account.

First In / First Out Policy – Points are redeemed across all point accounts, including the default point account, in a first in/first out sequence. This policy does not take into consideration points at risk.

We are actively working to include additional point redemption policies including “At Risk” and “Distributed” redemption policies.

Point Source Overview

A point source is the location from where points are issued. All points originate from a point source and are awarded into various point accounts (further explained in Point Accounts Level Overview below). This construct allows for reporting based on how many points were issued by specific point source, and also enables tracking of whether those points were spent, were expired, or are currently available in a customer point account as an existing liability.

Each point source consists of a number of configurable attributes, has an indicator providing the status of the source within the economy, and allows the client to build in inventory replenishment controls. Point sources also provide a ledger indicating the detailed transactions resulting in point inflows, point outflows, or point expiration.

Point Source Attributes

Each individual point source can be configured with the following attributes:

Point Source Name – Naming convention for what the point source is titled.

Point Account Associate – Define the Point Accounts that a given point source can deposit into.

Inventory Restriction – Amount of points that are available within the source. This number can be set to unlimited or a manual value. Any changes in point inventory levels are reflected in the Point Source Ledger. A point source designated as “unlimited” cannot be changed.

Frequency Restriction – Controls can be configured to ensure at Personal level or System level that a point source can only issue a certain number of points per configurable interval of time.

Point Source Status

Dependant on a number of factors, each point source displays one of the following status indicators:

Active – The points source is active as long as inventory is above zero or the point source is set to “unlimited,” and will now appear in any point source lists where points can be assigned in the system.

Paused – This indicates a points source that has been paused after going active or has fallen into a paused state because the inventory reached zero. When paused, no points can be issued from this points source. The source can be set back to active (unless point balance remains at zero) or archived from a paused state.


Pausing a points source will have downstream impacts on existing campaigns and loyalty rules.

Archived – A points source can only move into an archived state from a paused position. When requesting to archive a source, the client will be asked to confirm archive and will be notified that archiving will expire any remaining current inventory immediately.

Point Source Ledger

The Point Source Ledger provides a detailed transaction level record of all transactions into and out of a given point source. The ledger can be seen as a table view with the following information:

Date/Time – The date and time when an action was logged against the point source. The ledger defaults to showing the most recent activity first.

Action – Any addition of points or removal of points to the overall point source inventory.

Current Inventory – The total number of added points available for distribution to a customer.

Current Liability – The total amount of points that has been issued to a customer that are neither spent nor expired.

Point Accounts Overview

Within a points economy, points are issued from point sources into customer point accounts. While customers only see one loyalty points balance on the front end, point accounts serve as the tool that the SessionM Platform uses to calculate a customer’s spendable point balance, along with a customer’s tier qualifying point balance. Clients can configure as many point accounts as needed. A customer’s spendable point balance or tier qualifying status balance is summed across point accounts.

Point Account Attributes

Each point account is designated with the following attributes:

Name – Name of the point account.

Grouping Label – Mechanism to group similar point accounts with each other. This creates a label included in any balance request allowing the front end to sum points across point accounts as use cases require.

Point Source – Point sources that can deposit into this point account.

Default – Y or N – Spend operations will automatically deduct from default accounts.

Allow Negative Balance – Y or N – In the case of a return or ‘spend’ operation that would force a user balance below 0, this configuration controls whether the user can have a negative point balance. Allowing a negative point account balance ensures customer is responsible for recovering these points. Alternatively, the client can opt to prevent negative balances. This effectively shifts liability of these returns or other ‘spend’ operations to the client.

Set Maximum Balance – Defines the maximum balance that a point account can accrue.

Point Expiration Rule Configuration – Represents the frequency by which points are expired from the customer’s point account. Point configuration policies are further detailed in the Point Expiration section.


It is very unlikely that a point account would be designated as both spendable and tier-qualifying, as redemption of points via reward store would result in decrease of tier-qualifying balance. Typically these balances are tracked independently.

By default, all economies are set up with a spendable point account that contains no point expiration rule.

When the platform determines the spendable point balance for a given customer, it sums the customer’s available point balance across all “spendable” accounts. Similarly, when determining tier qualification status, the point accounts can be summed in the same way to determine the tier-qualifying point balance.

Point Expiration

Each point account can be configured with a different expiration policy allowing clients to expire points at different intervals. Each individual point account has an independant point expiration policy. Points can be set to expire based upon a customer inactivity time period or a points unspent time period. These rules enable point expiration within the following construct:

  • Customer Inactivity Expiration – Expire points if {Customer Inactive} within {X} {period} of point issuance where period is defined as days, weeks, months, years, calendar month, or calendar year.
  • Fixed Date Expiration – Expire points on a fixed date weekly/monthly/annually.
  • Rolling Expiration – Expire if {points unspent} within {x} {period} of point issuance where period is defined as days, weeks, months, years, calendar month, or calendar year.

Lastly, points can be expired as a result of an established customer behavior. The SessionM team can configure certain loyalty rules to listen for certain events and expire points based on that activity. As an example, if a customer were to cancel their Koalla Clothing credit card, the brand would be able to instantly expire all points in the independent “Credit Card Points Account.” This can be seen through the construct below:

  • If EVENT = “credit card cancellation”
  • OUTCOME = “Expire 100% of points in CREDIT CARD CUSTOMER POINT ACCOUNT.”

Example – How SessionM Builds a Points Economy

To review Points Economy structure, we can construct an example economy using the principles reviewed above. For the purpose of this example, we return to our sample retail brand “Koalla Clothing.” While this example represents one specific configuration, the SessionM Platform has the flexibility to adapt to each client’s points economy requirements.

Step 1 – Define Points Economy

As the foundation of points economy, the economy level would first be created and configured.

Once created and configured, the Point Redemption Policy must be defined:

  • Point Redemption Policy – How are points redeemed across customer point accounts?
    • Example – FIFO (First In, First Out)

Step 2 – Configure Point Sources

Once the economy has been established and configured, point sources are then configured that distribute points into customer point accounts.

Each point source has an independent inventory (which can be either replenished or unlimited) and a detailed point source ledger to track point additions, point subtractions, and point expirations. Three point sources have been configured for this example:

  1. Default Point Source – Primary point source where points can be distributed for activities such as online/in-store purchases or bonus points from campaigns related to the core business (weekend point multipliers, spend threshold multipliers, etc.).
    1. Example – Koalla distributes “1pt / $ spent” spendable points from this source for online and in-store purchases, along with “2x” points for purchases made on Tuesdays.
    2. Example – Koalla is also distributing “1pt / $ spent” Tier Qualifying points from this source. (This setup might change from client to client depending on business need.)
  2. Partnership Point Source – Client relationship with external vendor that requires special reporting and auditing requirements.
    1. Example – Koalla partnered with a popular rideshare company to reward customers with Koalla Bucks for each completed ride.
  3. Credit Card Source – A client branded credit card that awards customers with points on standard purchases that could, but do not need to be, at the client’s locations.
    1. Example – Koalla has a store branded “Koalla Card” that awards customers additional points for each dollar spent. Due to business reporting requirements, these points are awarded from an independent source.

Step 3 – Set Up Customer Point Accounts

With the point sources successfully configured, the economy needs one or more customer point accounts to store any distributed points.

Each customer point account is classified as “Spendable,” “Tier Qualifying,” etc, with the sum of all spendable accounts existing as the customer’s balance available for spend in the reward store. Tier Qualifying point accounts are summed in the same way.

Additionally, each customer point account is assigned an expiration rule. Points can expire based on customer inactivity, a fixed number of days, or a triggered outcome of a customer action.

Three point accounts have been configured for this example:

  1. Spendable Default Point Account – Points awarded as a result of completed loyalty rules and campaigns, with defined spend and expiration rules.
    1. Example – All points resulting from loyalty rule and campaign based Koalla purchases fall into this account. These points are spendable within the Koalla rewards store and ALL points expire after 150 days of customer inactivity.
  2. Tier Qualifying Point (TQP) Account – Points earned from tier qualifying transactions are awarded into this account. These points are used to determine tier status and are not-spendable.
    1. Example – Koalla has a rolling, annual tier program. Only points pertaining to Koalla Clothing purchases are deemed as tier qualifying. These points are non-spendable and expire 365 days from the date of issuance.
  3. Credit Card Point Account – Points earned from credit card usage are awarded into this account.
    1. Example – All points earned from using the “Koalla Card” are deposited into this account. These points are spendable in the reward store; all unused points expire after 365 days OR immediately upon customer cancellation of credit card.

Step 4 – Define Point Distribution Rules

Following successful configuration of the economy, point sources, and point accounts, rules can be established to award points as an outcome of various elements of the SessionM Platform, such as loyalty rules, campaigns, promo codes, etc. Please reference the user guides for each of these modules for information on configuring point distribution as an outcome.

SessionM is able to configure the base loyalty rules governing point issuance using the following construct:

Award [X] points per [Activity] from [Point Source] to [Point Account]

To demonstrate this, Koalla has created three base loyalty rules:

  1. Loyalty rule awarding 1 Koalla buck per customer $1 spent.
  2. Loyalty rule awarding fixed number of Koalla bucks for rides taken with the brand’s rideshare partner vendor.
  3. Loyalty rule awarding Koalla bucks for dollars spent via the “Koalla Card” credit card.

Let’s simulate three transaction scenarios in order to trigger point issuance into the customer’s point accounts based on each loyalty rule.

Scenario 1 – Award 1 “Koalla Buck” per $1 spent by customer.

  • Scenario – Customer spends $10 in a Koalla Clothing Store.
  • Rules

    “Award 1 POINT per $ SPENT from DEFAULT source to DEFAULT SPENDABLE account”


    “Award 1 POINT per $ SPENT from DEFAULT source to TIER QUALIFYING account”

As shown above, upon spending $10 in the Koalla store, the customer is issued 10 points (Koalla Bucks) into both the default point account and also the tier qualifying points account, as this purchase is a transaction that is eligible to count towards the customer’s tier status.

While the customer does not have visibility into the difference between the two accounts, he or she now has 10 points that are spendable via the Default Koalla Bucks Account and 10 points as a non-spendable, tier qualifying balance via the Tier Qualifying Point Account.

Scenario 2 – Award 100 Koalla Bucks for every ride a customer takes with a partnering rideshare company.

  • Example – Koalla customer takes one ride with the rideshare company.
  • Rule – “Award 100 POINTS per RIDE from RIDESHARE source to DEFAULT SPENDABLE account”

As shown above, once the Koalla customer has taken the ride, 100 points are awarded directly from the Rideshare Partner Points source. This brings the customer’s balance in their spendable Default Koalla Bucks Account to 110. We can also see that the points do not count towards the customer’s tier status (via the Tier Qualifying Points Account), as this is not an eligible tier purchase.

Scenario 3 – Award 2 Koalla Bucks per $1 spent on any purchase using a Koalla Credit Card.

  • Example – Customer spends $30 using a Koalla Credit Card on a purchase in a Koalla Clothing store.
  • Rule – Award 2 POINTS per $ spent from CREDITCARD source to CREDITCARD account
    • Note: Customer also earns base loyalty rule outcome (Scenario 1) for making the purchase in a Koalla Clothing store.

As shown above, the customer has received 60 Koalla Bucks for the credit card purchase. Since the purchase was also made in a Koalla Clothing store, the customer also receives 30 Koalla Bucks that are deposited into their Default Koalla Bucks Account and Tier Qualifying Point Account (eligible tier purchase).

As a result, the customer’s spendable balance has now increased to 200 points (combination of spendable default account and spendable credit card account), while their tier qualifying balance has increased to 40 points.