Loyalty Program Economics: Points, Breakage & Member Value

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Price the Juniper Rewards catalogue: value and cost per point for each reward, the reward rate members feel and the cost rate Juniper pays, and the reward with the best value per point.
• Estimate breakage from closed point cohorts, roll the 2026 points balance forward and value the points liability that sits on Juniper's balance sheet.
• Add up the full cost of Juniper Rewards for 2026, with the reward cost on an accrual basis, and express it per active member and as a % of member sales.
• Compare members with non-members, see why the raw gap overstates the program's effect, and measure the true uplift with a before/after test against look-alike customers.
• Assign 14 members to Bronze, Silver or Gold from their annual spend, apply the tier earn rates, and summarise the tier mix.
• Follow one month of issued points until they expire: cumulative redemptions, the redemption curve, the ultimate breakage, and a chart of the curve.
• Calculate the program's ROI twice, with the raw member gap and with the matched-test uplift, and find the break-even extra spend per member.
• Model three earn rates for 2027 side by side: member sales, gross margin, points issued, reward cost and the margin left after program costs, then choose the best scenario.