1. What Does the Ratio % Mean?
- The ratio is the % of the order value converted into points.
- Example: If ratio = 5%, and the customer spends €100, they earn 5 points (or 5 “units” of points).
- You decide how many points correspond to a reward value. For example, 1 point = €1 discount, or 1 point = €0.1 discount.
- Since your system allows only one % ratio for the whole program (all products), this ratio must balance margin and reward attractiveness across your catalog.
2. Recommended Ratio % by Business Type
| Reward Type |
Points Cost |
Equivalent Value* |
Notes |
| 5% Discount on next order |
5 - 8 pts |
€2.5 - €4 (if 1 pt = €0.5) |
Easy to redeem, encourage frequent orders |
| Fixed discount €5 off |
10 pts |
€5 |
Higher threshold but attractive |
| Free shipping (via Shopify code) |
6 - 8 pts |
Equivalent shipping cost |
Incentivizes larger orders |
| Free small product (via Shopify code) |
10-15 pts |
Depends on product cost |
Good for cross-selling |
3. How to Translate Points into Rewards
Because points earned = % order value (e.g., 5 points for €100 order at 5%), define points value to reward conversion to keep rewards attractive:
Example scenario:
- Ratio: 5%
- Points earned: 5 points per €100 spent
- Define 1 point = €1 discount → Too generous (5 points = €5 discount on €100, i.e., 5%)
- Or 1 point = €0.5 discount → 5 points = €2.5 discount on €100 (2.5%) — better for margins
4. Reward Examples and Points Thresholds
| Business Type |
Suggested Ratio % |
Notes |
| Fashion & Apparel |
5% - 8% |
Mid margin allows decent reward value |
| Grocery & Food |
1% - 3% |
Low margins, so keep ratio low to avoid losses |
| Electronics |
0.5% - 2% |
High price but low margin, reward sparingly |
| Beauty & Wellness |
4% - 7% |
Consumables with decent margin |
| Subscription Services |
Fixed points (non %-based if possible) or 5% |
Reward fixed renewal or use 5% if only % allowed |
* Adjust based on your point-to-currency value ratio.
5. Bonus Points Beyond Purchases (Add Fixed Points Manually)
Since you can’t set different % per action in your system, manually add fixed points for:
- Account creation: 3 - 5 pts
- Referral: 10 - 15 pts
- Review: 2 - 3 pts
- Social share: 1 - 2 pts
(Adjust values relative to ratio so points feel meaningful.)
6. Managing Wallet Balances & Redemptions
- Set a minimum redemption threshold, e.g., 5 points minimum.
- Keep points valid for 6-12 months to motivate usage.
- Use push notifications to remind users of points balance and available rewards.
Summary
| Reward Type |
Points Cost |
Equivalent Value* |
Notes |
| 5% Discount on next order |
5 - 8 pts |
€2.5 - €4 (if 1 pt = €0.5) |
Easy to redeem, encourage frequent orders |
| Fixed discount €5 off |
10 pts |
€5 |
Higher threshold but attractive |
| Free shipping (via Shopify code) |
6 - 8 pts |
Equivalent shipping cost |
Incentivizes larger orders |
| Free small product (via Shopify code) |
10-15 pts |
Depends on product cost |
Good for cross-selling |
Ratio = % of order converted to points; points value = fraction of €1 (you define)
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