Points liability calculator

Roll your points balance forward for the month, then price it two ways: expected fulfillment cost for operating decisions, and face value exposure for the conversation with finance.

Monthly movement

Illustrative opening figures, set to close at the 100 million points used in the article. Replace them with one award type at a time.

Opening points

Points issued

Points redeemed

Points expired

Manual adjustments

Negative values allowed. Every adjustment needs a reason code, approver, and source reference before it belongs in the close.

Redemption assumptions

Expected redemption rate

Estimate this from your own earn cohorts, not a benchmark.

Fulfillment cost per redeemed point

Weighted across the rewards members actually take.

Face value per point

The value shown to members. Drives the secondary figure only.

Reconciliation

Ledger balance

The balance carried for this award type in the general ledger. Compare like with like — if your ledger carries face value, the difference below reflects a basis mismatch rather than a control failure.

Investigation threshold

…or share of expected cost

The tool applies whichever is lower. Both are prefilled illustrative — replace with the threshold your finance function approved.

Your exposure at month end

Expected fulfillment cost of the closing balance

$420,000

100,000,000 points × 70% redemption × $0.006 per point

Closing points: 100,000,000
High case at 80% redemption: $480,000
Implied breakage: 30,000,000 points

Implied breakage is what the model does not expect to be redeemed. It is an output of member behaviour and contractual expiry — not profit, and not a target.

Reconciliation

Ledger balance: $415,000
Difference: +$5,000
Investigation threshold: $4,200

Above threshold — investigate before the close.

Face value of expected redemptions

$700,000

The member-facing value of the same expected redemptions — not of the whole outstanding balance. Indicative, for the conversation with finance — not a recognition figure. Treatment depends on your policy under ASC 606 / IFRS 15.

How this is calculated

Closing points equal opening points plus issued points, minus redeemed points, minus expired points, plus or minus manual adjustments. Expected cost equals closing points multiplied by the expected redemption rate multiplied by the weighted fulfillment cost per redeemed point. The high case reruns that at redemption plus ten percentage points, capped at 100%.

The two money figures are deliberately different numbers. Expected fulfillment cost is what the program is likely to spend, and it is the figure to plan and approve campaigns against. Face value exposure applies the value members see to the same expected redemptions; it is useful context, not a recognition figure. Conflating the two is the failure mode this model exists to prevent.

Reconciliation difference equals modelled expected cost minus the ledger balance for the same award type. The tool flags it when it exceeds the investigation threshold, applying the lower of your fixed amount and your percentage of expected cost.

This is a planning model, not an accounting treatment. It runs one award type at a time — purchase-linked awards, promotional grants, and manual credits should not share a row. Closing points can go negative if redemptions exceed the balance held; the tool shows that rather than hiding it, because it means the movement data is wrong. For the controls, cohort method, and approval gates behind the formula, read Loyalty Points Liability: Build Controls Before Campaigns .