Guide to loyalty points expiration – should you do it and how?

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.

What is points expiration and how it works?

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.

1. Fixed points expiration

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.

2. Dynamic points expiration

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.

The real job of points expiration

Expiration is not about taking points away. It’s about managing the economics and psychology of loyalty.

• ‍Control financial liability: Points sit on your balance sheet as a future cost. Without expiration, that cost grows, often faster than expected.‍
• Increase redemption behaviour: Expiring points create urgency. When used correctly, this leads to more visits, more spend, and re-activation of formant customers.
• ‍Improve program economics: You’re creating predictable redemption cadence, not uncontrolled liability spikes.‍
• Clean up zombie members: You’d be shocked how many inactive users carry large point balances because no one built an expiration engine.

Behavioural economics of expiration

People hate losing something they think belongs to them. This is pure loss aversion. Most companies oversimplify expiration and then get blindsided by:

• Customer backlash (“you stole my points”).
• Massive support spikes around expiry dates.
• Revenue drop because lower-value customers disengage.
• Internal chaos (Finance vs Marketing vs Product disputes).
• Technical debt: batch jobs failing, wrong expiration queues, inaccurate ledgers.

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.

• Use progress framing: “You’re 250 points away from a reward, use your points before they expire!”
• Use near-loss messaging: Reminders like “Your points expire in 14 days” increase conversion without negative sentiment if combined with a path to redemption.
• Use tier-based cushioning: Top-tier members should get longer expiration windows, grace periods, or no expiration at all.

If someone hasn’t earned enough points to redeem anything, expiring their tiny balance feels cruel. For light users, consider:

• Very long expiration
• Earning-based resets
• Micro-redemptions
• Donation options
• Low-cost instant rewards

When customers feel capable of redemption, expiration becomes motivating, not punitive.

Designing a points expiration strategy

Here’s a simple decision tree:

‍1. What’s your purchase frequency?

• High-frequency (coffee, QSR, beauty): 6–12 months expiration
• Mid-frequency (fashion, home): 12–24 months
• Low-frequency (luxury, high-ticket): 24–36+ months or inactivity-based only

2. Who are your core customers?

• VIP / high-tier – long or no expiration
• New / low-tier – longer windows until first redemption

3. What’s your liability profile?

• High liability – shorter windows or inactivity reset
• Low liability – longer windows, more friendly rules

4. How mature is your ops team?

• If support is lean, avoid aggressive expiration.
• Support spikes hurt more than liability relief helps.

How brands manage loyalty expiration?

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.

• H&M: Points expire 24 months after they are earned.
• Nordstrom (Nordy Club): Points expire after 12 consecutive months without program activity (e.g., earning points or redeeming rewards). ​
• Urban Outfitters (UO Rewards): Points expire annually on January 31. ​
• Sephora (Beauty Insider): Points expire after 12 months of inactivity, defined as no purchases, redemptions, or birthday gift claims.
• Ulta Beauty: Points expire at the end of the quarter, one year after they are earned. For example, points earned in July–September 2024 will expire on September 30, 2025. ​
• MAC Cosmetics (MAC Lover): Points expire annually on January 1. ​
• Starbucks: Stars expire six months after the calendar month in which they are earned. ​
• McDonald's (MyMcDonald's Rewards): Points expire six months after they are earned, on the first day of the following month. ​
• Burger King (Royal Perks): Crowns expire six months after they are earned, on the first day of the following month. ​
• Ford (FordPass Rewards): Points expire after 24 months of inactivity, defined as no points earned, redeemed, or tier activity. ​
• Nissan (MyNISSAN Rewards): Points earned through online shopping expire 24 months after the transaction date. ​

How about airline miles and hotel loyalty programs?

• Delta SkyMiles: Miles never expire, regardless of account activity.
• United MileagePlus: Miles never expire, even without account activity.
• American Airlines AAdvantage: Miles expire after 24 months of inactivity. However, miles do not expire for members under 21 or those holding an AAdvantage co-branded credit card.
• Hilton Honors: Hotel points expire after 24 months of inactivity. But any qualifying activity, such as earning or redeeming points, resets the expiration clock so customer can still redeem points. ​
• Marriott Bonvoy: Hotel points expire after 24 months of inactivity. But engaging in qualifying activities, like stays or credit card use, prevents expiration of accumulated points.​

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.

Red flags that your expiration policy is broken

• Redemption spikes only right before expiration – customers aren’t engaged, they’re panicking.
• High-value customers complaining – check your tier mapping.
• Support tickets spike during expiration week.
• Liability still growing – wrong expiration window or too many promo points.
• Redemption rate under 20% – your rewards aren’t compelling.

Summary

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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