How to use the Coupon and Points Cost Burden Calculator
Coupons and loyalty points issued are not the same thing as coupons and points redeemed, and mixing the two either inflates the cost or hides it. This calculator keeps them apart from the start, reporting a burden on an issued basis and a burden on a redeemed basis side by side, with each result label stating which basis it uses.
The issued basis divides the total face value handed out in a month by that monthโs sales. It ignores redemption entirely, so it is the ceiling on what the program could cost. The redeemed basis multiplies the total issued by the redemption rate you enter and divides that by sales. That is the figure that reaches the income statement; whatever is never redeemed stays as breakage.
No default redemption rate is supplied, because it swings widely with offer type, expiry window and minimum spend requirements. Use the actual redeemed-to-issued ratio from earlier campaigns. The annual redeemed value is the monthly figure shown on screen multiplied by 12, so it reconciles if you check it by hand.
This page was written as of September 2026 and is for reference only. Outstanding loyalty points are typically carried as a liability, and breakage recognition and unclaimed property rules differ by state, so confirm the accounting treatment with your CPA.
Frequently Asked Questions
Use the issued basis to cap promotional exposure and the redeemed basis to forecast what actually hits margin. The calculator shows both and names the basis in each label, so the two never get confused.
There is no default here on purpose. Redemption varies enormously with offer type, expiry window and minimum spend. The most reliable input is redeemed value divided by issued value from your own past campaigns.
Not straightforwardly. Outstanding points are usually carried as a liability until they expire, and breakage recognition plus unclaimed property rules vary by state. Confirm the treatment with your accountant before booking it as income.