Loyalty Points Calculator

Turn your points program's earn and redeem rates into a real discount percentage, so you know exactly what you're giving back.

Your numbers

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Points earned per $1 spent

Points required for a reward

Value of that reward

Amount a customer spends (to test)

Your result · updates as you type

Effective discount rate

Each point is worth $0.050. Earning 1 per $1 means every dollar spent hands back about 5% in future rewards.

Value per point: $0.050
Dollars to spend for one reward: $100
Rewards earned on $80.00: 0.8

This treats every point as eventually redeemed. In practice, a share of points are never redeemed (breakage), which lowers the program's real cost below this number.

Breakdown

Points earned per $1: 1
Points needed for a reward: 100
Reward value: $5.00
Value per point: $0.050
Effective discount rate: 5%
On a $80.00 spend: 80 points ≈ $4.00

What your points program actually gives back

"Earn 1 point per dollar, 100 points = $5" doesn't obviously translate into a discount rate. This works it out directly: the value of one point, and what that means as a percentage of every dollar spent.

Value per point = reward value ÷ points required · Effective discount rate = points earned per $1 × value per point × 100

Example: the default numbers

Earn rate: 1 point per $1 spent
Redeem: 100 points = $5

Each point is worth $5 ÷ 100 = $0.05. Effective discount rate is 1 × $0.05 × 100 = 5%. A customer needs to spend $100 to earn one reward, and $80 of spend earns roughly $4.00 in future value.

Setting your own rates

Above roughly 8% effective discount, a points program starts to cost about as much as a straightforward discount code, with more complexity for the customer to track. Make sure the engagement benefit is worth the extra cost.
Breakage lowers real cost. Not every point earned gets redeemed. This calculator assumes full redemption, which is the cautious (worst-case) assumption for your cost.
Check what your loyalty app supports before finalizing rates: Shopify and WooCommerce loyalty apps like Smile.io, LoyaltyLion and Yotpo Loyalty each set earn and redeem rates slightly differently, so match this to how yours is actually configured.

Questions people ask

How do I calculate the value of a loyalty point?

Divide the reward's dollar value by the points required to redeem it. 100 points for a $5 reward means each point is worth $0.05.

What's a typical loyalty program discount rate?

Many programs land somewhere around 2% to 5% effective discount. Above about 8%, it starts costing about as much as a plain discount code.

Does this account for points that never get redeemed?

No, it assumes full redemption, which is the cautious assumption. If your program has meaningful breakage (points that expire unused), the real cost is somewhat lower than this number.

How much do customers need to spend for one reward?

Points required for a reward divided by your earn rate. At 1 point per $1 and 100 points needed, that's $100 of spend.

Last reviewed 30 September 2026.