Points Liability

Points liability represents the estimated future cost of points that customers have earned but not yet redeemed. Accounting for points: - Unredeemed points = Future obligation - Must be recorded on balance sheet - Estimated based on expected redemption - Breakage reduces liability Managing points liability: - Point expiration policies - Breakage rate estimation - Regular liability review - Redemption promotions - Program modifications Breakage: - Points that expire unredeemed - Typically 15-30% of points issued - Reduces liability but may hurt engagement - Must be estimated for accounting Best practices: - Clear expiration policies - Regular communication - Encourage healthy redemption - Monitor liability growth