Points expiration is one of those loyalty mechanics that looks simple from the outside, push a date onto the ledger, call it a day, but in practice it’s one of the most emotionally loaded and financially impactful decisions you’ll make. Do it poorly and customers feel punished. Do it well and you reduce liability, boost redemption, and drive more profitable engagement.
This guide walks through how expiration works, when you should (and shouldn’t) use it, and how to design a system that customers don’t hate and your CFO actually likes.
Points expiration is a process in rewards programs that sets an activity time frame on collected loyalty points. The type of loyalty points expiration relies heavily on the industry you are in. The general rule is that businesses which offer more exclusive and not-so-frivolous products and services should offer longer expiration periods, if any. Think of airlines, hotels, car dealerships, or real estate agencies.Plenty of airlines and hotels are now pausing or dropping their expiration policies and allowing for unlimited points (airmiles) accrual. To make the deal sweeter, they even active points pooling and household accounts to make collecting and keeping loyalty points easier.
On the other hand, everyday brands like FMCG, mobility services, and grocery can offer shorter, or even better – dynamic expiration dates – that rely not only on the calendar but also on dynamic factors, such as member inactivity.
Fixed expiration is based on the calendar. This approach is simple as all you need is to choose a calendar date when loyalty points expire. Typically, it's at the end or beginning of a new year. But the pros of this solution end here – fixed expiration is rigid in its nature and, as such, can turn customers down from taking an active part in the program in fear of losing their progress and membership benefits.
Dynamic expiration changes with customer behavior, most typically customer activity. With this approach, you set an expiry date if a customer doesn't earn or use points in a predefined time (e.g., 6,12,18 months). In this setup, customers have bigger control over their points. This sort of expiry policy is more effective for incentivizing repeat purchases and active participation in your customer loyalty program. The biggest drawback of this solution is the lack of proper technology to manage granular expiration rules.
In reality, strong programs use hybrids, like different expiration windows by tier or promo points follow different rules than base points.
Expiration is not about taking points away. It’s about managing the economics and psychology of loyalty.
People hate losing something they think belongs to them. This is pure loss aversion. Most companies oversimplify expiration and then get blindsided by:
But point expiration can also be a strong motivator when handled properly. Here’s how to make it work for you rather than against you.
If someone hasn’t earned enough points to redeem anything, expiring their tiny balance feels cruel. For light users, consider:
When customers feel capable of redemption, expiration becomes motivating, not punitive.
Here’s a simple decision tree:
Points expiration is a hot topic in the loyalty marketing world. While some brands use it to encourage engagement, others avoid it altogether to build long-term trust. To help you determine the right approach for your business, I investigated current loyalty expiration policies across major industries – from retail and QSR to airlines and hotels.
* The following T&Cs were noted in April 2025.
How about airline miles and hotel loyalty programs?
This cross-industry snapshot shows that while many brands use inactivity-based expiration to motivate engagement, some leaders, especially in travel and major hotel chains, opt for non-expiring rewards to build long-term loyalty. The best expiration strategy depends on your customer lifecycle, engagement frequency, and the level of flexibility you want to offer within your rewards structure.
When done well, points expiration isn’t a penalty, it’s a design tool. It helps control liability, nudge customers back into activity, tailor experiences by segment, and create a fair, predictable rhythm in your loyalty program.
When done poorly, it backfires fast: eroding trust, frustrating customers, overwhelming support, and damaging your brand.
So treat expiration as a strategic lever, not a cost-cutting trick. Model it, test it, and communicate it clearly. Used intentionally, it becomes one of the simplest ways to drive healthier engagement and a better loyalty experience overall.
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