Introduction to Loyalty Tiers

Loyalty Tiers are designed to reward customers progressively as they demonstrate ongoing loyalty engagement, spend, or visit frequency. They create exclusivity and motivate customers to increase their activity to unlock better rewards.

Customers are grouped into levels (e.g. Bronze, Silver, and Gold). Each level carries specific benefits, and movement between levels is determined by predefined rules.

Consider how a client would use tiers as part of their loyalty program:

Bronze >> Silver >> Gold

• Customers are entered into the Bronze tier upon joining the loyalty program
  • In the default Bronze tier, customers earn 1 point for every $1.00 spent
• The next tier level of Silver is achieved after a 1,000 points have been credited to the tier membership
  • The Silver tier incentivizes customers with unlocking new offers
• The highest tier, Gold, is earned after a 2,500 points have been achieved
• The Gold tier is the most rewarding, giving customers the richest offers in the rewards program

Loyalty Tier Setup

Tiers can be setup via the dashboard or API. This section will define the key elements of the API POST payload for a three tier setup. After each tier is created, PUT calls will be needed to update the promotion and demotion tierIds as needed.

See the Loyalty Tiers Recipe for a step-by-step guide on creating and managing tiers, along with the prerequisites needed to get started.

Promotion Rule Set

Each tier (except the highest) has a promotion rule set which defines how customers move to the next tier: Bronze to Silver or Silver to Gold, based on tier points earned, number of transactions, or amount spent. And/or conditions can be set for the promotion rules to customize the promotion ruleset.

Examples of the and/or conditions to define promotion rules include:

• Earn 1,000 Points
• Earn 1,000 Points OR Spend $500
• Earn 1,000 Points AND complete 25 Transactions

As transactions are settled, POS Connect will update tier membership balances and promote customers to higher tiers as they become eligible. Using our example above, if Gemma has a tier membership with 850 tier points (Bronze tier) and makes a purchase that earns her 200 tier points, she will be promoted to the Silver tier when the transaction is settled.

Overrides

Each tier level gives the option to override the associated scheme's Base Earn amount. This will override the number of points set as the Base Earn if the consumer is in a given tier. An example would be the base loyalty points scheme is set up with an earn rate of 1 point per $1.00 spent. For higher tiers, such as Gold, you may want to increase the Base Earn rate, by awarding Gold tier customers 2 points per $1.00 spent.

Another override option is the ability to change the scheme's Points Expiry rules per tier. This feature will override the Points Expiry set on a Scheme if the consumer is in a given tier. As an example, customers in the default lowest level tier may have points expiring at the end of the sixth month on the last day, however Gold tier customers can have a 12-month expiry rule instead, offering them more time to spend their points.

Tier Review & Balance Reset

Each tier (outside of the default, lowest tier) has a set of customizable rules that determine when customers will be evaluated and what will happen to their tier membership at the end of the membership period.

Two key elements of the tier setup are when the membership expires and when the tier membership balance resets to zero.

• Membership Expiry Period: Date when a customer’s tier is reassessed, and
• Balance Reset Period: Date when balances are reset to zero for a fresh cycle.

These values can be configured by selecting a period offset. The period offset is the number of days, weeks, months or years after the tier membership creation date, used to set the expiration date.

Absolute Date

The Absolute Date is when tier membership will expire and be up for evaluation exactly x days, weeks, months or years after it is created. Consider an example where the tier membership is set to expire 6 months exactly after creation:

• Example A: Gemma joins the loyalty program on April, 12 2026. Her tier membership will be evaluated and the balance reset on October 12, 2026
• Example B: Rob joins the loyalty program on May 5, 2026. His tier membership will be evaluated and the balance reset on November 5, 2026.

Rounding Rules

Additionally, instead of having random tier membership expiration dates throughout the year, you may want to extend tier membership until the last day of a predefined period. This is where rounding rules can be applied to round the membership expiry date and evaluation period to the:

• End of the month
• End of the quarter (March 31, June 30, September 30 or December 31)
• End of the half year (June 30)
• End of the year (December 31)

Here are some examples of the impact of rounding rules to tier membership expiry and evaluation dates for a tier membership that was created on March 14, 2026, where the period is 6 months.

If the rounding rule was 1 year, here is the impact for the same tier membership creation date of March 14, 2026.

Max Tier Demotion

At the end of a review period, AIR assesses each tier membership against the promotion rule sets. By default, a customer is placed in the tier that matches their activity in that period. This can mean dropping more than one tier at once.

Without a limit, a customer with little to no transactions in a given period can drop several tiers at once and lose most of their benefits. Limiting demotion to a set number of tiers lets a retailer soften the drop so the customer is not penalized too heavily.

To avoid this, you can limit how many tiers a customer can be demoted in a single review. Set demotion.maxTierDemotionPerReview on the tier.

"demotion": {
    "maxTierDemotionPerReview": { "enabled": true, "value": 1 }
}

Example: A customer is in the Gold tier. During the review period they earn only 200 points, which only qualifies for Bronze.

This setting applies only when the end-of-review process runs. It does not affect refunds. See Refunds and Tier Demotion below.

Refunds and Tier Demotion

Refunds reduce the tier balances. Set demotion.reevaluateTierOnBalanceDebit to true on a tier to re-evaluate the customer's tier after a refund.

Refunds that do not re-evaluate the tier can leave a customer in a higher tier than their remaining spend justifies, for example by making a large purchase and then returning it. Re-evaluating on refund keeps tier status tied to what the customer actually keeps, so retailers don't pay for benefits that weren't earned. Customers whose refunds are genuine are never demoted below the tier they held at the start of the period.

When enabled, a refund can demote a customer, but never below the tier they held at the start of the current tier period. This stops a large purchase followed by a refund from earning or losing status unfairly.

Example: reevaluateTierOnBalanceDebit is true

A customer starts the tier period in Bronze with 850 tier points. They make a purchase that earns 200 tier points. The balance reaches 1,050, which meets the Silver promotion rule, so they are promoted to Silver.

The customer then refunds the purchase. The 200 tier points are debited and the balance returns to 850, which is below the Silver promotion rule. Because reevaluateTierOnBalanceDebit is true, AIR re-evaluates the tier and the customer is demoted from Silver back to Bronze.

Example: reevaluateTierOnBalanceDebit is false

The scenario is the same. The customer starts in Bronze with 850 tier points, earns 200 and is promoted to Silver, then refunds the purchase.

The 200 tier points are still debited and the balance returns to 850. Because reevaluateTierOnBalanceDebit is false, AIR does not re-evaluate the tier after the refund and the customer stays in Silver. The customer is only reassessed at the next end-of-review process.

Tier Membership

As customers are enrolled into a tier, a tier membership is created in their wallet. This acts as the container that holds all tier-related data for an individual. The tier membership is created at the same time as the points account. Only one tier membership can be assigned to a loyalty points account.

Tier memberships track balances using tier points, spend or transactions:

• Points: points earned in a Tier Period to track towards any Tier Promotions
• Spend: amount of Spend (Basket Value, after discounts) in a Tier Period to track towards any Tier Promotions
• Transactions: count of transactions in a Tier Period

Earning Tier Points

Points are earned in the tier memberships from eligible campaigns. Points campaigns have a fixed reward value based on the product or basket qualifying spend. To match that number of points to be rewarded in the tier membership, the campaign can be set to match that value. Alternatively the campaign can reward a different set of points to the tier membership when the offer is redeemed.

Campaign Integration

To help incentives higher tier promotion, campaigns can be limited to only allow redemption for customers in specific tiers. This allows brands to create tier-exclusive promotions and rewards.

• Campaigns can target specific tiers (e.g., “Silver-only offer” or “Silver + Gold only”)
• Contributions to tier balances (Points, Spend, Transactions) can be configured within campaign rule

Real-world example:
A retailer may run a double-points campaign only for Silver members, encouraging Bronze customers to progress.

Key Terminology