How many points per rupee?
A member will not read your scheme document. They will remember one number: what a bag, a coil or a box is worth to them. Set that number well and the program runs itself; set it carelessly and the finance team discovers the problem when the redemption bill arrives.
Channel loyalty programs in India typically set the earn rate so that rewards are worth 1 to 3 percent of the member's purchase value for retailers and dealers, and ₹5 to ₹100 per unit for trade influencers depending on the product's price. The point-to-rupee ratio should be one a member can convert in their head, usually 1 point = ₹1 or 1 point = ₹0.10, with SKU weighting used to steer mix, a minimum redemption threshold of ₹200 to ₹500 to keep payout costs sane, and a 12-month expiry to bound the liability. Adding points without removing any is the commonest way a program's cost doubles without anyone deciding it should.
Start from the percentage, not the points
Decide first what share of purchase value you are prepared to return to the channel as reward. For distributors it is usually under 1 percent because their margin structure already carries the relationship; for direct dealers 1 to 2.5 percent; for retailers and sub-dealers 1 to 3 percent; for influencers a pool of 0.6 to 2 percent of the channel revenue they influence, paid per unit. These are the bands in the channel incentive guide, and the cost calculator turns them into a budget.
Only then convert to points. If a ₹1,000 purchase should earn ₹20 of reward and one point is ₹1, the earn rate is 2 points per ₹100. Writing it that way exposes the number to the member and to finance in the same units.
Choose a ratio people can do in their head
| Ratio | Member experience | Where it fits |
|---|---|---|
| 1 point = ₹1 | Transparent; the balance is a rupee amount | Retailer and dealer programs paying cash or UPI |
| 1 point = ₹0.10 (10 points per rupee) | Bigger numbers feel richer; conversion still easy | Influencer programs with small per-unit rewards |
| 1 point = ₹0.25 or other odd values | Members cannot value the balance; trust drops | Avoid |
| Points with no stated value, catalogue only | Value hidden; members compare catalogue prices to market | Only if the catalogue is clearly better than market |
Per-unit rewards for influencers
Influencers earn per scan, so the design is a rupee value per SKU rather than a percentage. Typical bands are ₹5 to ₹20 on low-value fast-moving items like a switch or a fitting, ₹20 to ₹50 on a coil of wire or a can of paint, and ₹50 to ₹100 or more on a geyser, a water tank or a bag-heavy job. Completion bonuses for a full installation reward the whole-job decision better than per-unit points alone; see electrician incentive ideas.
Weight SKUs, but sparingly
Weighting a focus SKU at two or three times the base rate is the cheapest way to move mix. The discipline is to weight a handful of SKUs at a time and to remove the weighting when the objective is met, because every weighting that stays becomes part of the base rate in members' minds. Festive multipliers follow the same rule: announced, time-boxed, withdrawn. The slab designer models the cost of a weighting before you launch it.
Thresholds, expiry and the liability you are creating
- Minimum redemption. ₹200 to ₹500 keeps UPI transfer counts and support load manageable and gives members a reason to keep earning.
- Expiry. Twelve months from earning, communicated at earning and again 30 days before, bounds the outstanding liability; see points liability and breakage.
- Caps. A per-member monthly cap protects against gaming and against one dealer absorbing the pool; the fraud prevention post covers the rules.
Point inflation: the quiet budget doubler
Programs rarely cut an earn rate. They add a festive multiplier, then a launch bonus, then a tier uplift, then a referral bonus, and two years later the effective reward is 5 percent of purchase value while the scheme document still says 2. Review the effective rate quarterly by dividing points issued by purchase value, and treat every addition as needing a removal. The budget planning guide has the review template.
Key takeaways
- Set reward value as a percentage of purchase first (1–3% for retailers and dealers), then convert to points.
- Use 1 point = ₹1 or ₹0.10; odd ratios erode trust because members cannot value their balance.
- Influencers earn per unit: ₹5–₹100 by product value, plus completion bonuses for whole jobs.
- Weight SKUs and run multipliers only with an end date; review the effective earn rate every quarter.
Frequently asked questions
How many points should a retailer earn per rupee?
Set the reward value first, typically 1 to 3 percent of purchase value for retailers, then convert. At 1 point = ₹1 that is 1 to 3 points per ₹100 purchased.
What is a good point-to-rupee conversion for a loyalty program?
One a member can do in their head: 1 point = ₹1 for retailer and dealer programs, or 1 point = ₹0.10 for influencer programs where per-unit rewards are small. Avoid odd ratios.
How much should an electrician or plumber earn per scan?
₹5 to ₹20 on low-value items such as switches and fittings, ₹20 to ₹50 on a coil of wire or a can of paint, ₹50 to ₹100 or more on high-value units, plus completion bonuses for full installations.
What minimum redemption threshold should a loyalty program use?
₹200 to ₹500. It keeps transfer counts and support load manageable and gives members a reason to keep earning.
Should loyalty points expire?
Yes, usually 12 months from earning, communicated when earned and again 30 days before expiry. Expiry bounds the outstanding liability and is standard in Indian channel programs.
What is point inflation in a loyalty program?
The gradual rise in the effective earn rate as multipliers, bonuses and tier uplifts are added and never removed. Review points issued against purchase value quarterly and pair every addition with a removal.