Should Loyalty Points Expire? Here's What We Recommend

When you're setting up a loyalty programme for your business, the question of expiry will come up sooner or later. Should your customers' hard-earned points disappear after a certain period? Or should they remain available indefinitely?

It's a genuine debate, and there are arguments on both sides.

On one hand, expiring points create urgency. They give customers a reason to act now rather than later. They also help businesses manage liability — accumulated points represent a future cost, and expiry limits that exposure.

On the other hand, expiring points can damage the very relationship your loyalty programme is meant to build. Nothing sours a customer's experience faster than discovering their rewards have vanished.

So which approach is right for your business? Let's break down both sides — and explain why, for most small businesses, the answer is clear.

The Case for Expiring Points

Let's acknowledge the legitimate reasons some businesses choose to expire loyalty points.

Urgency drives action. When customers know their points will disappear, they're motivated to use them. That can increase visit frequency and encourage redemptions that might otherwise never happen.

It creates communication opportunities. "Your points are about to expire" is a reason to reach out. These reminder messages can re-engage customers who've drifted away and prompt return visits.

It limits financial liability. Unredeemed points represent a future obligation. For publicly traded companies with large loyalty programmes, this shows up on balance sheets. Expiry policies help manage that exposure.

It encourages programme engagement. The theory goes that customers who know points expire will pay more attention to their balance and engage more actively with the programme.

These arguments have merit — particularly for large enterprises managing complex loyalty ecosystems with millions of members. Major airlines and hotel chains have historically used expiry to manage their programmes.

But here's the thing: many of those same companies are now moving away from expiration. And for small businesses, the calculus looks very different.

Why Points Shouldn't Expire (For Most Businesses)

For independent cafés, salons, retail shops, and service businesses, the drawbacks of expiring points far outweigh any benefits. Here's why.

1. Expired Points Feel Like Punishment

Put yourself in your customer's shoes. You've visited a business eight times, steadily accumulating stamps toward a free reward. Then one day you discover those stamps have vanished — not because you did anything wrong, but because you didn't visit frequently enough.

How would that make you feel?

For most people, the answer is cheated. Frustrated. Annoyed. And very unlikely to continue participating in that loyalty programme.

The fundamental promise of any rewards programme is simple: keep coming back, and we'll reward your loyalty. When you expire points, you're adding an unspoken condition: "...but only if you come back on our schedule."

That changes the dynamic entirely. Instead of rewarding loyalty, you're penalising customers for not being loyal enough. And that's a fast way to turn supporters into critics.

A customer who loses points won't just quietly accept it. They'll tell friends. They'll leave reviews. They'll remember how it felt — and they'll factor that into future decisions about where to spend their money.

2. It Motivates Through Fear, Not Reward

Every interaction with your loyalty programme shapes how customers feel about your business. When the primary message is "hurry up or lose what you've earned," you're using negative motivation.

Compare these two communications:

Expiry approach: "Hi Sarah, your 45 points will expire in 14 days. Visit now to use them before they're gone!"

Positive approach: "Hi Sarah, you're just 5 points away from a free treatment! We'd love to see you soon."

Both messages encourage a visit. But one creates anxiety and pressure, while the other creates anticipation and excitement. The emotional residue of each interaction is completely different.

Psychology research consistently shows that positive reinforcement builds stronger, longer-lasting behaviour change than negative reinforcement. When customers feel good about your programme — when earning rewards feels like a gift rather than a race against time — they engage more genuinely and sustainably.

The goal gradient effect demonstrates this perfectly. Studies show customers naturally accelerate their purchasing as they approach a reward. They don't need the threat of expiry to motivate them. The reward itself is motivating. Why introduce negativity when positivity works better?

3. Expiry Adds Complexity You Don't Need

Simple loyalty programmes outperform complicated ones. Every rule you add creates friction, confusion, and opportunities for misunderstanding.

The moment you introduce expiry, you need:

• Clear terms and conditions explaining the policy

• Systems to track point ages and expiry dates

• Communications to warn customers before points expire

• Staff training so your team can explain the policy

• Processes to handle complaints when customers are upset

For a small business, that's significant overhead — both operationally and in customer service time. And what do you gain? A mechanism that, at best, creates urgency and, at worst, alienates customers.

Contrast that with a simple, no-expiry programme: "Earn points. Redeem rewards. That's it." No asterisks, no fine print, no explanations needed. Customers understand it instantly, and you never have to defend a policy that takes something away from them.

With Perkstar, you can set up points and stamp cards that never expire — keeping your programme straightforward and your customers happy.

4. It Hurts Your Most Persuadable Customers

Think about your customer base as a spectrum. At one end, you have your regulars — the people who visit weekly, know your staff by name, and would come regardless of any loyalty programme. At the other end, you have one-time visitors who may never return.

In between sits the most important group: occasional customers who could become regulars with the right encouragement. These are the people your loyalty programme should be working hardest to convert.

Expiring points disproportionately affects this middle group. Your regulars earn and redeem quickly — expiry rarely touches them. Your one-time visitors never engage anyway. But your occasional customers — the ones visiting every few weeks or months — are exactly the people most likely to lose points.

And when they do? You've just punished the customers you most wanted to nurture. You've taken away the very incentive that might have converted them from occasional to regular.

A smarter approach lets these customers accumulate rewards at their own pace. Maybe they only visit once a month. Over time, those visits add up. Eventually, they earn a reward — and the positive experience of redeeming it makes them more likely to continue. You've rewarded their loyalty, however gradual, rather than penalising them for not meeting an arbitrary timeline.

5. It Undermines the Customer Experience

At its core, a loyalty programme should enhance how customers feel about your business. It should make interactions more positive, not less. It should deepen relationships, not add conditions to them.

Expiring points work against this goal. They introduce tension into a relationship that should feel easy and rewarding. They shift the programme from "we appreciate you" to "you need to appreciate us faster."

Customer experience matters more than programme mechanics. A simple programme with no expiry, run by a business that genuinely values its customers, will outperform a complex programme with urgency tactics and fine print every time.

Your customers have enough deadlines, pressures, and things to remember. Don't make your loyalty programme another source of stress. Make it a source of delight instead.

Rethinking What Points Really Represent

Part of the problem is how businesses think about unredeemed points.

It's tempting to view accumulated points as a liability — a future cost sitting on your books. From that perspective, expiry looks like good financial management. When points expire, that liability disappears.

But this framing misses the point entirely.

Unredeemed points aren't a liability. They're a relationship. Each point represents a customer who chose your business, made a purchase, and engaged with your programme. That's valuable — far more valuable than the cost of whatever reward they'll eventually claim.

When points expire, you're not reducing liability. You're damaging relationships with customers who chose to engage with you. You're telling them that their slower pace of loyalty doesn't count.

Consider what "expired" points actually represent:

• A customer who moved away and lost their accumulated rewards

• A busy parent who couldn't visit for a few months

• Someone going through a difficult period who had other priorities

• A customer who simply has a longer purchase cycle than average

None of these people abandoned your business. Life happened. And when they're ready to return, you want them to find their loyalty recognised and waiting — not erased.

The businesses that build genuine, lasting customer loyalty understand this. They view their programmes as relationship tools, not accounting exercises. And they never take away what customers have earned.

What to Do Instead

If you're convinced that points shouldn't expire — but still want to encourage engagement and drive visit frequency — there are better approaches.

Use positive communications. Instead of "your points will expire," try "you're so close to your next reward!" Celebrate progress rather than threatening loss.

Surprise and delight. Send unexpected bonus points on customer anniversaries or birthdays. This creates positive touchpoints without any pressure.

Create tiered benefits. If you want to reward your most active customers, offer enhanced perks (like double points days) rather than punishing less frequent visitors.

Re-engagement campaigns. If a customer hasn't visited in a while, reach out with a special offer to welcome them back — not a warning that they're about to lose something.

Set up automations. With Perkstar, you can schedule push notifications that gently remind customers about their balance and encourage visits, without any expiry pressure attached.

The goal is the same — driving engagement and visits — but the method respects your customers rather than pressuring them.

When Expiry Might Make Sense

To be fair, there are limited situations where expiry could be appropriate:

Promotional bonus points. If you run a "double points week" promotion, you might reasonably expire those bonus points after a set period. This keeps the promotion finite without affecting customers' regular earnings.

Very high-value rewards. If redemption values are substantial (think hundreds of pounds), a long expiry window (several years, not months) might be justified for financial planning.

Membership programmes with annual fees. If customers pay for membership, tying points to the membership period can make sense — as long as it's crystal clear from the start.

Even in these cases, err toward generosity. Long expiry windows (measured in years) cause far less damage than short ones. And clear, proactive communication matters enormously.

For the vast majority of small business loyalty programmes? No expiry is the right call.

The Bottom Line

Your loyalty programme exists to build relationships with customers. Every design choice should support that goal.

Expiring points might create short-term urgency, but they undermine long-term loyalty. They turn a positive programme into a source of anxiety. They punish the customers you most want to convert. And they add complexity without meaningful benefit.

The best loyalty programmes are simple, generous, and customer-focused. They make people feel valued, not pressured. They reward engagement without penalising slower customers.

When you set up your programme with Perkstar, you have full control over how points and stamps work. Our recommendation? Keep it simple. Let customers earn at their own pace. Never take away what they've accumulated.

Your customers will thank you — with their continued loyalty.

Ready to build a customer loyalty programme that feels rewarding, not restrictive?

Start your free 14-day Perkstar trial — no credit card required.