A
- Account Takeover
- Account takeover is a form of loyalty fraud in which an attacker gains control of a member's account, usually through stolen or guessed credentials, then drains the points balance or redeems rewards.
- Accrual
- Accrual is the process by which a loyalty member earns program currency, such as points or miles, when a qualifying event occurs.
- Activation Rate
- Activation rate is the share of newly enrolled members who take a first meaningful action, such as an initial earn or redemption, within a set period after joining.
- Active Member Rate
- Active member rate is the share of enrolled members who have engaged with a program within a defined period, such as earning or redeeming in the last twelve months.
- Advocacy Loyalty
- Advocacy loyalty is the stage where members actively promote a brand to others, through reviews, referrals, social posts, and word of mouth, not just buying themselves.
- Agentic AI
- Agentic AI is artificial intelligence that pursues a goal by planning and taking a sequence of actions on its own, rather than only answering a single prompt.
- AI Agents in Loyalty
- AI agents in loyalty are software agents that carry out program tasks with limited human direction, such as building a segment, drafting an offer, monitoring for fraud, or answering a member's question.
- Alliance Earning
- Alliance earning lets a member earn and use loyalty currency across a group of partnered brands, most familiarly airlines in a global alliance, so flying one member airline credits the member's home program.
- Anniversary Rewards
- Anniversary rewards recognize the date a member joined a program or reached a milestone, granting a bonus, gift, or benefit each year on that anniversary.
- API-First Loyalty
- API-first loyalty is a design approach in which every capability of the system, enrollment, earning, redemption, offers, and member data, is available through documented APIs before any interface is built.
- ASC 606
- ASC 606 is the United States revenue recognition standard that governs how businesses account for contracts with customers.
- Attitudinal Loyalty
- Attitudinal loyalty is loyalty measured by how a member thinks and feels about a brand, their preference, trust, and willingness to recommend it, as distinct from behavioral loyalty, measured by what they buy.
- Average Order Value
- Average order value is the mean amount a member spends per transaction, calculated as total revenue divided by number of orders.
- Award Availability
- Award availability is whether a specific reward can actually be redeemed at a given time, most often whether an airline is releasing seats for miles on the flight a member wants.
- Award Chart
- An award chart is the published table that shows how many miles or points a member needs to redeem for a given reward, such as a flight in a specific cabin between two regions.
B
- B2B Loyalty
- B2B loyalty is a program that rewards business customers, distributors, or channel partners rather than individual consumers, recognizing purchasing on behalf of a company.
- Badges
- Badges are a gamification mechanic that grants members a visible token for reaching a milestone or completing an achievement.
- Behavioral Loyalty
- Behavioral loyalty is a program design that rewards what members do beyond spending: completing a profile, writing a review, keeping an activity streak, referring a friend, or engaging with an app.
- Billing and Reconciliation
- Billing and reconciliation in loyalty is the accounting process that verifies every earning and redemption transaction is correctly recorded, priced, and, in partner programs, invoiced and paid.
- Birthday Rewards
- Birthday rewards give members a gift, discount, or bonus points around their birthday, a widely used mechanic because the occasion is personal and the reward feels like recognition rather than a generic promotion.
- Bonus Points Event
- A bonus points event is a time-limited promotion that awards members extra points above the standard earn rate, often to drive traffic during a slow period or to launch a product.
- Breakage
- Breakage is the share of issued loyalty points that members never redeem.
- Burn Rate
- Burn rate is the pace at which loyalty members redeem their accumulated currency, measured as points burned over a period.
C
- Card-Linked Offers
- Card-linked offers tie a promotion directly to a member's registered payment card, so the reward applies automatically when they pay, with no coupon to present.
- Cash Plus Points
- Cash plus points is a redemption option that lets members combine loyalty currency with cash to pay for a reward.
- Cashback Program
- A cashback program rewards members with a return of value expressed in money, as a percentage of spend credited back rather than as points.
- Challenges
- Challenges are a gamification mechanic that sets members a defined goal to complete within a period, such as making a number of purchases or trying specific products, in exchange for a reward.
- Channel Incentives
- Channel incentives are rewards a manufacturer or brand offers to the distributors, dealers, and resellers who sell its products, motivating them to stock, promote, and prioritize the brand over competitors.
- Charitable Redemption
- Charitable redemption lets members convert their points into donations to a cause instead of taking a personal reward, with the program funding the gift on their behalf.
- Churn Rate
- Churn rate is the share of members who stop engaging with a program over a period, whether by lapsing, disengaging, or formally leaving.
- Clearing House
- A clearing house in loyalty is the central function that records cross-partner transactions and calculates what each partner owes or is owed in an ecosystem program.
- Closed-Loop Program
- A closed-loop program is one in which members can earn and redeem currency only within a single brand or a tightly controlled set of outlets.
- Community Loyalty
- Community loyalty builds attachment by connecting members to each other and to the brand around a shared interest or identity, not only through individual rewards.
- Composable Loyalty
- Composable loyalty is an approach that assembles a program from independent, interchangeable components, such as a rules engine, an offer service, and a rewards catalog, rather than one fixed product.
- Control Group Testing
- Control group testing measures a loyalty action's effect by withholding it from a randomly chosen, comparable group of members and comparing their behavior to those who received it.
- Conversational Loyalty
- Conversational loyalty lets members interact with a program through natural language in chat or voice, asking about their balance, finding offers, or redeeming rewards as if talking to a person.
- Cost of Redemption
- Cost of redemption is the actual expense a program incurs to fulfill a reward when a member redeems, covering the reward itself plus any fulfillment and partner costs.
- Cost Per Point
- Cost per point is the average cost a program incurs to fulfill one unit of its loyalty currency when a member redeems it.
- Currency Devaluation
- Currency devaluation is a reduction in what a unit of loyalty currency is worth, usually because the program raises the number of points needed for the same reward.
- Customer Data Platform
- A customer data platform, or CDP, is software that unifies customer data from many sources into a single persistent profile that other systems use.
- Customer Lifetime Value
- Customer lifetime value is the total net value a member is expected to generate over the full course of their relationship with a business, not just a single transaction.
D
- Deferred Revenue
- Deferred revenue is income a business has received or become entitled to but has not yet earned, so it is recorded as a liability until the obligation is met.
- Digital Wallet Pass
- A digital wallet pass is a loyalty card added to a phone's wallet app, such as Apple Wallet or Google Wallet, replacing a plastic card or separate app login.
- Distance-Based Earning
- Distance-based earning is an accrual model, traditional in airline programs, where members earn currency based on distance traveled rather than money spent.
- Dormancy
- Dormancy is the state of a member who has stopped engaging with a program but has not formally left, showing no purchases, logins, or redemptions for an extended period.
- Dynamic Award Pricing
- Dynamic award pricing sets the number of points a reward costs based on real-time factors like demand, cash price, and availability, rather than a fixed chart.
- Dynamic Segmentation
- Dynamic segmentation groups members into segments that update automatically as their behavior and attributes change, rather than fixed lists built once and left static.
E
- Earn and Burn
- Earn and burn is the core loop of a loyalty program: members earn a currency such as points or miles through purchases and other actions, then burn it on rewards, discounts, or experiences.
- Ecosystem Loyalty
- Ecosystem loyalty is a program model in which multiple brands or partners share one loyalty currency and one member base.
- Elite Status
- Elite status is a high tier in a loyalty program that grants a member premium benefits, recognition, and service.
- Emotional Loyalty
- Emotional loyalty is a member's genuine attachment to a brand, the preference and advocacy that persist even when a competitor offers a better deal.
- Engagement Scoring
- Engagement scoring assigns each member a number that summarizes how actively they participate in a program, combining signals such as purchase frequency, redemptions, logins, and offer response.
- Enrollment Bonus
- An enrollment bonus is a reward given to a customer for joining a loyalty program, such as points, a discount, or a gift on sign-up, used to overcome the inertia of registering.
- Enrollment Rate
- Enrollment rate is the pace at which a program signs up new members, often expressed as the share of eligible customers who join over a period.
- Event-Driven Architecture
- Event-driven architecture is a software design in which components communicate by producing and reacting to events, such as a purchase, an enrollment, or a tier change, rather than fixed request-and-response calls.
- Experiential Rewards
- Experiential rewards are benefits redeemed for experiences rather than goods or discounts: concerts, sporting events, exclusive dinners, travel, or once-in-a-lifetime access.
F
- Family Pooling
- Family pooling is a form of points pooling that lets members of one household combine their loyalty balances into a shared account.
- First-Party Data
- First-party data is information a brand collects directly from its own interactions with customers: purchases, app usage, site visits, and program activity.
- Fixed-Value Redemption
- Fixed-value redemption is a model in which each unit of loyalty currency is worth a set amount toward a reward, regardless of demand.
- Frequent Flyer Program
- A frequent flyer program is an airline's loyalty program that rewards travelers with miles or points for flying and for spending with partners, redeemable for flights, upgrades, and other benefits.
G
- Gamification
- Gamification is the use of game mechanics, such as points, levels, challenges, streaks, badges, and leaderboards, to make loyalty participation more engaging.
- Gift Card Redemption
- Gift card redemption lets members exchange points for gift cards to the brand or to third-party retailers, a flexible and popular reward that converts loyalty currency into recognizable spending value.
H
- Hard Benefits
- Hard benefits are the tangible, quantifiable rewards a loyalty program delivers: discounts, free items, upgrades, waived fees, and points.
- Headless Loyalty
- Headless loyalty is an architecture that separates the program's logic and data, the back end, from the customer-facing presentation.
- Hotel Loyalty Program
- A hotel loyalty program rewards guests for stays and related spending with points and elite status, redeemable for free nights, room upgrades, and amenities.
- Hybrid Loyalty
- Hybrid loyalty is a program that combines models rather than relying on one, most often blending free earn-and-burn mechanics with a paid tier, or transactional rewards with behavioral and experiential ones.
I
- IFRS 15
- IFRS 15 is the international revenue recognition standard governing revenue from contracts with customers, closely aligned with the United States ASC 606.
- In-Store Attribution
- In-store attribution is the practice of connecting a physical purchase to a known loyalty member, so offline sales can be tracked, rewarded, and analyzed like online ones.
- Incrementality
- Incrementality is the share of a program's outcomes that would not have happened without it, the added sales or retention the program actually caused rather than behavior that would have occurred anyway.
- Instant Win
- Instant win is a promotional mechanic that gives members an immediate chance to win a prize, revealed on the spot rather than after a drawing.
L
- Lapsed Member
- A lapsed member is one who was active in a program but has stopped engaging, typically defined by a period without a purchase or interaction.
- Leaderboards
- Leaderboards are a gamification mechanic that ranks members against one another by points, activity, or achievement, using competition to drive engagement.
- Lifetime Status
- Lifetime status is elite standing a member earns permanently after meeting a high cumulative threshold, keeping the tier without further requalification.
- Loyalty Audit
- A loyalty audit is a structured review of a program's mechanics, economics, technology, and performance to find where it is leaking value or falling short of its goals.
- Loyalty Fraud
- Loyalty fraud is any scheme that steals or manipulates loyalty value, including account takeover to drain points, fake enrollments to harvest sign-up bonuses, insider manipulation of balances, and reselling of stolen rewards.
- Loyalty Management System
- A loyalty management system is the software platform that runs a loyalty program end to end, handling member enrollment, points accrual and redemption, tier tracking, offers, and reporting.
- Loyalty Middleware
- Loyalty middleware is the integration layer that connects a loyalty engine to the systems it depends on, such as point of sale, e-commerce, CRM, and payment platforms.
- Loyalty Platform
- A loyalty platform is the underlying technology on which loyalty programs are built and operated, providing the core services for members, points, rules, offers, and integrations.
- Loyalty Rules Engine
- A loyalty rules engine is the software component that decides what happens when a member acts: how many points a purchase earns, which tier applies, which offer triggers, and how a redemption is priced.
M
- Member Engagement
- Member engagement is the degree to which loyalty members actively participate in a program: earning, redeeming, opening messages, using the app, and responding to offers.
- Merchandise Redemption
- Merchandise redemption lets members exchange points for physical products from a program's rewards catalog, from electronics to household goods.
- Milestone Rewards
- Milestone rewards are benefits a member earns on reaching a defined point of progress, such as a spend threshold, a number of visits, or a status anniversary.
- Multi-Tenant Loyalty
- Multi-tenant loyalty is a software model in which one platform instance serves multiple separate programs or brands, each isolated as a tenant with its own data, rules, and configuration.
- Multiplier Events
- Multiplier events are promotions that multiply the points a member earns during a defined window, such as triple points weekends or a 5x category month.
N
- Net Promoter Score
- Net promoter score is a customer-loyalty metric based on one question: how likely a member is to recommend a brand, rated on a scale.
- Next Best Action
- Next best action is a personalization approach that, for each member at each moment, selects the single most valuable thing the program should do next, such as send an offer, prompt a review, or suggest a redemption.
O
- Offer Engine
- An offer engine is the software component that builds and delivers promotional offers to loyalty members, such as bonus points, a discount, or a free item tied to specific conditions.
- Offer Fatigue
- Offer fatigue is the decline in member response that sets in when a program sends too many promotions, so incentives lose their pull and members start ignoring them or opting out.
- Omnichannel Loyalty
- Omnichannel loyalty is a program that recognizes a member and applies consistent earning, redemption, and benefits across every channel: in store, online, in app, and by phone.
- Open-Loop Program
- An open-loop program lets members earn or redeem currency across multiple brands or spend it in forms usable beyond the issuing program.
P
- Paid Loyalty
- Paid loyalty is a program model in which members pay a fee, one-time or recurring, to join and receive benefits, rather than earning their way in through spending.
- Partner Onboarding
- Partner onboarding is the process of bringing a new partner into an ecosystem loyalty program, covering the commercial agreement, technical integration, rule setup, and testing before the partner goes live.
- Partner Portal
- A partner portal is the self-service interface where an ecosystem program's partners manage participation, configure and view offers, monitor transactions, and access settlement statements.
- Partner Settlement
- Partner settlement is the financial process that moves money between partners in an ecosystem program when a member earns value with one partner and redeems it with another.
- Partner-Funded Rewards
- Partner-funded rewards are rewards paid for by a program partner rather than the program operator.
- Pay with Points
- Pay with points lets members apply their loyalty balance toward a purchase at checkout, covering all or part of the price at a set conversion rate.
- Personalization Engine
- A personalization engine is software that tailors offers, content, and recommendations to each member from their profile and behavior.
- Points Accelerators
- Points accelerators are mechanisms that let members earn points faster than the base rate, either as a promotional boost or a purchasable benefit.
- Points Expiration
- Points expiration is a program rule that voids loyalty currency after a defined period, often measured from the last earning or account activity.
- Points Liability
- Points liability is the balance-sheet obligation created when members earn loyalty points they have not yet redeemed.
- Points Marketplace
- A points marketplace is a redemption environment where members spend their loyalty currency across a broad range of options, such as travel, merchandise, gift cards, and experiences, often from many suppliers in one place.
- Points Pooling
- Points pooling lets multiple members combine their individual loyalty balances into a shared pool they can redeem together.
- Points Transfer
- Points transfer is the movement of loyalty currency from one account or program to another.
- POS Integration
- POS integration is the connection between a loyalty system and the point of sale, the checkout software used in stores, so members earn and redeem during a normal transaction.
- Predictive Churn
- Predictive churn is the use of models to identify members likely to stop engaging or buying before they leave, scoring each member on their risk of lapsing.
- Premium Loyalty
- Premium loyalty is a paid model in which members pay for a tier of elevated benefits that sit above a free program, rather than replacing it.
- Program Health Metrics
- Program health metrics are the indicators that show whether a loyalty program is performing, spanning enrollment, active member rate, earn and redemption activity, retention, and liability.
- Progressive Profiling
- Progressive profiling is the practice of gathering member information gradually over time, asking for a little at each interaction rather than everything at sign-up.
- Promo Abuse
- Promo abuse is the exploitation of loyalty promotions beyond their intended use, such as creating duplicate accounts to claim a welcome bonus repeatedly, stacking offers against the rules, or gaming referrals.
- Propensity Modeling
- Propensity modeling is the use of statistical or machine learning models to estimate how likely a member is to take a specific action, such as making a purchase, churning, or redeeming a reward.
- Punch Card
- A punch card is the simplest loyalty mechanic: a member earns a mark for each qualifying purchase and receives a reward after collecting a set number.
- Purchase Frequency
- Purchase frequency is how often a member buys within a period, one of the most direct measures of loyalty behavior.
Q
- Qualifying Spend
- Qualifying spend is the portion of a member's spending that counts toward reaching or keeping a tier, as opposed to spending that only earns currency.
R
- Reactivation Campaign
- A reactivation campaign is a targeted effort to bring dormant or lapsed members back into active participation, using incentives, reminders, or personalized offers timed to a member's history.
- Real-Time Processing
- Real-time processing is the handling of loyalty events the moment they occur, so a member's points, tier, and eligibility update instantly rather than in an overnight batch.
- Receipt Scanning
- Receipt scanning lets members earn loyalty currency by photographing a purchase receipt, capturing transactions that happen outside a brand's own point of sale.
- Recommendation Engine
- A recommendation engine is software that predicts which products, rewards, or content a member is most likely to want and surfaces them, drawing on the member's history and patterns across similar members.
- Redemption
- Redemption is the moment a loyalty member exchanges accumulated program currency for something of value: a flight, a room night, merchandise, a discount, or an experience.
- Redemption Rate
- Redemption rate is the share of issued loyalty currency that members eventually redeem, usually measured as points burned divided by points earned over a period.
- Referral Program
- A referral program rewards existing members for bringing in new customers, typically giving both the referrer and the new member a bonus once the newcomer completes a qualifying action.
- Retention Rate
- Retention rate is the share of members who remain active in a program from one period to the next.
- Retroactive Points
- Retroactive points are currency credited for a past qualifying purchase that was missed at the time, awarded after the member claims it or the program identifies the gap.
- Revenue-Based Earning
- Revenue-based earning is an accrual model in which members earn loyalty currency in proportion to how much they spend, rather than by units purchased or distance traveled.
- RFM Segmentation
- RFM segmentation groups members by three behavioral dimensions: recency of last purchase, frequency of purchases, and monetary value of spend.
- Rolling Qualification
- Rolling qualification measures a member's tier progress over a moving window, such as the trailing twelve months, rather than resetting at a fixed calendar date.
S
- Sandbox Environment
- A sandbox environment is an isolated copy of a loyalty system where teams test rules, offers, and integrations against realistic data without affecting live members.
- Share of Wallet
- Share of wallet is the portion of a member's total spending in a category that goes to one brand rather than its competitors.
- Single Sign-On
- Single sign-on, or SSO, lets a member use one set of credentials to reach multiple applications or partner sites without logging in again at each.
- Soft Benefits
- Soft benefits are the intangible rewards of a loyalty program: recognition, priority, status, and special treatment that cost little to deliver but shape how a member feels.
- Soft Landing
- Soft landing is a program design that moves a member down only one tier, rather than all the way to the base, when they fail to requalify for their current level.
- Spend-Based Earning
- Spend-based earning is an accrual model where members earn loyalty currency based on the amount they spend.
- Stackable Offers
- Stackable offers are promotions that a member can combine on a single transaction, so two or more incentives apply at once, such as a category bonus layered on a tier multiplier.
- Standalone Selling Price
- Standalone selling price is the price at which a business would sell a good or service separately, on its own.
- Status Match
- Status match is an offer that grants a member elite status in one program based on status they already hold in a competitor's program.
- Streaks
- Streaks are a gamification mechanic that rewards members for a continuous run of a desired behavior, such as buying or checking in on consecutive days or weeks.
- Subscription Loyalty
- Subscription loyalty is a paid-loyalty model built on a recurring fee, typically monthly or annual, that keeps a bundle of benefits active as long as the member pays.
- Surprise and Delight
- Surprise and delight is a tactic of giving members unexpected rewards or recognition they did not earn or request.
- Sustainability Rewards
- Sustainability rewards recognize members for environmentally or socially responsible choices, such as recycling, choosing lower-impact products, or offsetting a purchase, giving points or perks for the behavior.
T
- Targeted Offers
- Targeted offers are promotions delivered to a specific segment of loyalty members rather than the entire base, based on attributes such as purchase history, tier, location, or predicted behavior.
- Tier
- A tier is a level within a loyalty program that grants members escalating benefits as they qualify, usually by spend, activity, or status.
- Tier Qualification
- Tier qualification is the set of requirements a member must meet to reach or keep a level in a loyalty program, such as a spend, nights, or flights threshold within a defined period.
- Tokenization
- Tokenization is a security technique that replaces sensitive data, such as a payment card number or a member identifier, with a non-sensitive substitute called a token that has no exploitable value if stolen.
- Trade Loyalty
- Trade loyalty is a program aimed at the trade, the professionals who buy or specify products in their work, such as contractors, mechanics, or stylists, rewarding them for choosing and recommending a brand.
- Transactional Loyalty
- Transactional loyalty is loyalty driven by the tangible rewards a program gives for spending, where a member keeps buying mainly because of the points, discounts, or perks.
- Transfer Partners
- Transfer partners are the external programs a loyalty program lets members move currency to or from at an agreed exchange rate.
W
- Webhooks
- A webhook is an automated message one system sends to another the instant an event happens, delivering the event's data to a URL the receiver controls.
- Welcome Bonus
- A welcome bonus is a reward given to new members for joining a program or completing a first action, designed to spark early engagement.
- White-Label Loyalty
- White-label loyalty is a program built on a provider's platform but presented under the client's brand, so members see the client's name, design, and domain rather than the vendor's.
- Win-Back Campaign
- A win-back campaign is a targeted effort to re-engage members who have lapsed or gone dormant, using offers, reminders, or incentives to bring them back before they are lost for good.
Z
- Zero-Party Data
- Zero-party data is information a member intentionally and proactively shares with a brand, such as preferences, intentions, and interests provided through profiles, surveys, or quizzes.
