Optimizing Liability Management for Loyalty Currencies

Evert de Boer () and Xiao Yao Chin ()
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Evert de Boer: Managing Partner, On Point Loyalty
Xiao Yao Chin: Partner, On Point Loyalty

Chapter Chapter 5 in Loyalty Programs and the Currency Effect, 2025, pp 95-114 from Springer

Abstract: Abstract When you issue loyalty currencies, you need to manage the liability. This is important and even more so because of the accounting rules. Running a successful loyalty currency is akin to being a central bank. In this chapter, de Boer and Chin offer practical advice on how to measure and manage the outstanding liability of points. In this context, it is inevitable to talk about breakage, which is an important contributor to the currency effect. De Boer and Chin introduce the key concepts associated with breakage and identify the various drivers. The authors offer a comprehensive overview of the relevant factors in breakage and liability management, highlighting common mistakes to avoid.

Keywords: Loyalty program; Strategy; Liability management; Breakage; Accounting; Redemptions; Expiry (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-78849-9_5

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DOI: 10.1007/978-3-031-78849-9_5

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