Decisions · Layer 1
How should you price a loyalty redemption catalogue
Price the catalogue from member value, fulfilment cost, supply, and point liability together. Vary only where the economic reason is visible and defensible.
Price the catalogue from member value, fulfilment cost, supply, and point liability together. Vary only where the economic reason is visible and defensible.
## The decision boundary Catalogue pricing converts a reward into a required balance, cash amount, or both. It needs a point value, fulfilment cost, availability rule, funding rule, and cancellation treatment.
## The options ### Fixed point price Choose this when cost and supply are stable. The cost is additional operating complexity. ### Cost-linked price Choose this when supply and fulfilment vary materially. The cost is more measurement and exception handling. ### Tiered access Choose this when status legitimately changes access or price. The cost is a stronger funding and review obligation.
## What it costs you The currency is liability, margin, engineering time, operating capacity, or member trust. In a hypothetical illustration, 2 points per dollar on 400 dollars of spend creates 800 points. At a hypothetical 1 cent value, that is 8 dollars of liability. Ten comparable cases therefore represent 80 dollars of stated value.
## How to decide 1. Name the behaviour or obligation the rule must control. 2. Identify the independent evidence that proves the event. 3. Price the member, operating, and liability cost of each option. 4. Choose the least complex control that protects the least reversible outcome. 5. Set the evidence that would cause a later review.
## What breaks The failure mode is a rule that measures its own success. Keep source evidence, eligibility, issuance, adjustment, and fulfilment separately observable. Revisit the recommendation when the balance has no meaningful value or the event cannot be independently verified.