Redemption

The redemption rule defines how customers can use their points. Points have a dollar value (or equivalent currency unit). Points can be redeemed by shoppers during checkout to get a discount on their purchase. The redemption rule, also referred to as the redemption rate, is the conversion rate used to compute the value of the points accumulated by customers. It is set to 100 points are worth $1 (or equivalent currency unit).

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How it works

Customers have the option to use their points during the checkout process. When a customer decides to redeem their points, the maximum amount of redeemable points for the order is withdrawn from their Beans account and applied to the order. Customers do not decide on the quantity of points they want to redeem. The discount does not apply to shipping fees.

For example, consider the following order:

• Subtotal (Cart value): $100
• Shipping Fees: $20
• Total: $120

The shopper has a balance of 3,500 points. When they choose to redeem, they will get a discount of $35 = 3,500 points / 100 points/$. This discount will decrease the subtotal value of the cart by $35.

Discount = Points balance / 100

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Settings

The redemption can be configured to maximize your business goals. It is possible to set a maximum discount by redemption as a percentage of the cart value, to force customers to reach a minimum balance before being able to redeem, or limit redemption to a collection of items. The redemption options differ by integration and can be configured at the integration level.

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Redemption rate

The default redemption rate is the best rate to, psychologically, maximize customers’ engagement in your rewards program. It is easier for shoppers to compute the points value when 100 points are worth $1, than when 250 points are worth $1. It also offers the best granularity to configure your rewards program.

For example, a redemption rate of 10 points to $1 makes it impossible to give customers less than 10% cashback value on orders. With such a rate, the minimum number of points you could award to a customer per dollar spent is 1 point which would be 10 cents. Conversely, a redemption rate of 1,000 points to $1 creates unnecessary inflation that decreases the value of the points. If you need to collect a thousand units of something before just getting a dollar discount, it does not sound enticing.

While the redemption rate is fixed, it is worth noting that all the other rules’ values are customizable. This implies that you still have 100% control over the value of your rewards program. You still decide the value of the reward awarded to customers. In addition, the redemption settings allow you to set how customers can use their points.

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Pending debits

A pending debit transaction occurs when the customer attempts to redeem their points. At the moment a shopper attempts to redeem their points during a purchase, a debit is created with the status pending. This means that the debit is not yet fully recorded into the customer’s account history. Once the customer completes the order, the debit status is updated from pending to committed and the transaction will be recorded in the history.

The pending state exists to prevent customers from exploiting the system. For example, a customer could try to redeem multiple orders at the same time and get more discounts than they are allocated. It also allows customers to cancel the redemption process at any time without any drawback.

The pending debits can be monitored by the merchant in the Beans admin dashboard when looking at a member’s transactions history.

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Frequently Asked Questions

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Why is the default redemption rate 100 points to $1?

The default redemption rate of 100 points to $1 makes it easier for both merchants and shoppers to know the value of points. For example, if you give the customer 5 points for each dollar spent, this would be equivalent to 5% cashback. So it makes it easier to resonate in terms of percentage. It is worth noting that in the Beans system, points can only be whole numbers, so you cannot give a decimal amount of points. So the default rate gives you the best granularity. 1 point is worth ¢1 (one cent). Learn more about the redemption rate

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Is it possible to update the redemption rate to 1 point worth $1?

This is a frequent question that we get from merchants. This is in fact a very bad idea. Since in the Beans system points can only have integer values, this would mean that if you are giving your customers 1 point per dollar spent, they will get 100% cashback. Better list your products for free.

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What if my local currency is inflated and has a lot of digits?

In some currencies, product prices are already in the thousands. And the default rate of 100 points to 1 unit of currency makes it possible for the customer to have a large digit amount of points, for example, millions or billions of points. While this is not a technical limitation, it can disturb the customer experience and cause display overflow in some places. The Beans team is aware of this issue and is working on solutions.

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Will there be any way in the future to adjust the redemption rate?

At this stage, our team is exploring solutions to make Beans even more accessible to more merchants, especially those who are working with an “inflated currency”. There is a feature request on our roadmap about it. We encourage you to upvote and contribute by sharing your use case.