Loyalty points are awarded by default on payments made by cash, card, check, and custom payments (if configured).

If you do not wish to award loyalty points for discounted items that are paid using any of the above payment types, you can do the following:

Regular Loyalty Program

Create a loyalty points promotion and do not select the option to Auto Apply.
Points will not be automatically awarded on the invoices.
To award points, you must create a campaign and link the Loyalty Points Promotion.
This campaign is made available in POS and front desk must manually select the campaign to award loyalty points.
You must train the front desk to apply the campaign only on invoices that do not contain discounted items.

Tiered Loyalty Program

You can restrict awarding of loyalty points on discounted items only if you restrict awarding of points to closed invoices.
If you setup your loyalty program to consider closed invoices only, you can use the option Award points on discounted items to tier members  to restrict awarding of points on discounted items.

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