In a Tiered Loyalty Program, loyalty points are reversed based on the following:
If payment is removed from invoice
If a payment is removed from an invoice, the complete accrued points for that invoice are reversed.
- If 100 points were accrued, 100 points are reversed.
- It does not matter which tier the guest was in when the points were accrued nor does it matter which tier the guest is in when the points are reversed.
- If there are no balance points available to reverse (because the guest has already redeemed them), the guest's points balance will turn negative and any points accrual will be used towards the clearing of the negative balance.
On Invoice Refund
If an invoice is refunded, the points are reversed based on the tier the guest is currently in.
- If the tier when the points were accrued and the tier the guest now is in are the same, the same number of points are reversed.
- If the tier when the points were accrued and the tier the guest now is in are different, then:
- The ratio in which the points were awarded in the base invoice is calculated.
The ratio is then used for points reversal.
- The tier in which the guest has the highest number of points is determined and
points are reversed from that tier.
- If points in highest tier are exhausted, points are reversed from the next tier that
that has the highest points.
- Deductions from tiers happens until the required points are reversed. If points in
all the tiers are exhausted, the guest's points balance will turn negative.
Consider the following tier setup of an organization:
If the accrued points of a guest in each tier is as follows:
Consider the following invoice refund scenario of a guest:
- Guest is recently upgraded to the Platinum tier.
- Guest purchased a package worth $1500 and the payment against the invoice was made in 5 equal installments of $300 each.
- For 4 installments, the points were awarded as per the accrual settings of the Gold tier.
- The 5th installment points were awarded as per the accrual settings of the Platinum Tier.
- If the guest is given a refund of $750, let's see how the points are reversed.
Let us first see the points accrued on the $1500 payment for each installment:
- A total of 900 points were awarded on $1500 invoice.
- 600 points were accrued in the Gold tier for $1200 spent.
- 300 points were accrued in the Platinum tier for $300 spent.
If the guest is given a refund of $750 on the $1500 invoice, let's see how the points are reversed:
- On the base invoice of $1500 dollars, 900 points were awarded.
- Ratio of points awarded on total invoice is 900/1500 = 0.6.
- For $750 dollars, the number of points to be reversed is:
750 x 0.6 = 450 (points to be reduced).
- The guest has maximum number of points (1200) in the Gold tier.
- 450 points are reversed from the Gold tier.