Loyalty Codes. Customers: Getting Started. Overview. Introduction to loyalty programs

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1 1 Customers: Getting Started Loyalty Codes Overview Customer loyalty ( frequent buyer ) programs allow you to reward customers for their business and encourage customers to purchase more frequently in higher dollar amounts. Loyalty programs can also promote customer good will, showing your customers that you value their business. This document provides an overview on setting up customer loyalty programs as well as information for defining loyalty codes. Introduction to loyalty programs Loyalty programs come in all shapes and sizes, but the basic concept remains the same. Points are awarded to each customer based on their purchases. These points might be awarded based on: Total dollars spent Dollars spent on purchases of specific merchandise (or categories of merchandise) Quantity purchased of specific merchandise (or categories of merchandise) When a customer has accumulated enough points, that customer can be rewarded with free merchandise, discounts, gift certificates, or the achievement of a special status that provides more favorable pricing. Loyalty programs don t require the CounterPoint Receivables Option. In this document, we will use the example of a sporting goods store called Camptown Sports that has a frequent buyers club. Camptown Sports awards 10 points for every dollar spent on merchandise in the store, and allows customers to redeem points just like cash, with every 200 points worth $1.00. When a customer has spent a total of $500 over time, that customer is awarded Preferred Customer status, which allows them to earn double points.

2 Customers: Getting Started Loyalty Codes 2 Setting up loyalty programs To set up a loyalty program, you must perform the following steps: Step Step 1 Step 2 Description Allow the use of loyalty programs using Setup / Customers / Control. (See Customers Control for more information.) Define loyalty codes using Setup / Customers / Loyalty codes. (See the Defining loyalty codes section on page 2 for more information.) Step 3 Associate loyalty codes with customer categories, using Setup / Customers / Categories. (See Customer Categories for more information.) Step 4 Step 5 Step 6 Defining loyalty codes Define which users can redeem loyalty points, using the Point of Sale authorization screen in Setup / System / Users. (See Users for more information.) If you allow points to be redeemed for merchandise, define a points pay code for each store using Setup / Point of Sale / Stores / Stores. (See Stores for more information.) If you intend to use the Loyalty Points History Report or the Loyalty Points Redemption Report, specify in Setup / Point of Sale / Control to retain ticket history. (See Point of Sale Control for more information.) Select Setup / Customers / Loyalty codes.

3 Customers: Getting Started Loyalty Codes 3 This menu selection is available only if you specified in Setup / Customers / Control to use loyalty programs. NOTE: Loyalty codes are stored in the Point of Sale Tracking file. You can print a report of existing loyalty codes using Setup / Reports / Customers / Loyalty codes. 1. Loyalty code Enter the ID of this loyalty code. Press F1 to scan through existing loyalty codes. When an existing loyalty code is displayed, press F3 to delete this loyalty code. 2. Description Enter a description for this loyalty code. Press F2 to copy an existing loyalty code. 3. Adjustment item category Enter the item category to use for tracking point adjustments. If you don t want to track point adjustments, leave <blank> for None. Using an adjustment item category allows you to add or subtract points manually in ticket entry by selling an item that has been assigned this category (e.g., item POINTS with category POINT). For example, a customer has a complaint, and in order to foster good will, you agree to grant this customer an additional 100 points. To issue these points, you could sell the item POINTS to this customer to grant points without affecting the sale amount of the ticket.

4 Customers: Getting Started Loyalty Codes 4 You could also grant the additional points using Customers / Loyalty programs / Grant loyalty points, (see Customers / Loyalty programs / Grant loyalty points in Working with Loyalty Programs for more information), but that function doesn t maintain any record of point changes. Using adjustments allows you to keep a history of when and why these extra points were awarded. To add or subtract points and keep a history of the changes, you must define an item with a price of $0 to sell in ticket entry, and assign this item the same item category that you enter in this field. We recommend using a category name such as POINT for clarity. Additional information on using this method of granting or revoking points: See Customers / Loyalty programs / Grant loyalty points in Working with Loyalty Programs for more information. 4. Max points per ticket Enter the maximum number of points that can be earned on a single ticket. Press F1 for Unlimited, if there is no limit on the number of points that can be earned on a single ticket. Increment Enter the increment for the awarding of points (1, 5, 10, or 100). Camptown Sports only awards points in increments of 10. Their customers can earn 10 points, 20 points, or 30 points on a ticket, but not 5 points or 17 points, because these are not increments of Rounding method Round to nearest increment Increase to next increment Truncate To round earned points to the nearest increment. To increase earned points to the next increment. To truncate earned points to the closest lower increment. Camptown Sports awards 10 points for every dollar in purchases, and allows points to be awarded only in increments of 10 (defined in the previous field). If a customer spends $5.25 (for a value of 52.5 points), this field determines whether the customer will earn 50 or 60 points on this purchase: Rounding method Round Increase Truncate Customer would earn 50 points 60 points 50 points 6. Points based on Sale amount Quantity To award points based on sale amount. To award points based on purchase quantity.

5 Customers: Getting Started Loyalty Codes 5 Multiplier Enter the multiplier that determines how many points to award. Camptown Sports awards 10 points for every dollar in purchases, so they would enter Sale amount for Points based on and 10 for Multiplier. If they instead awarded 50 points for each item purchased, they would enter Quantity for Points based on and 50 for Multiplier. Reduce for discounts? (Not applicable) displays if you specified to award points based on quantity. Specify whether to reduce points earned for discounted tickets by selecting Yes or No. If you answer No, points are awarded based on the total sale amount of eligible line items before any ticket discount. If you answer Yes, points are reduced proportionately based on the discount amount. Reduce for redemptions? Specify in how you want points to be earned for purchased merchandise when points are redeemed on the same ticket or invoice. Choices for the Reduce for redemptions method are: Yes, set to zero (default) If any points are redeemed, zero points are earned. This is the method used in previous versions. No Redeemed points do not reduce earned points. Yes Redeemed points reduce earned points. Redeemed points also reduce loyalty points balance. No, set to zero if fully paid in points If the ticket is partially paid with points, do not reduce points. If the ticket is fully paid with points, zero points are earned. Ensures that no points are earned for free gifts on a separate ticket. Yes, set to zero if fully paid in points If the ticket is partially paid with points, redeemed points reduce earned points. If the ticket is fully paid with points, zero points are earned. Redeemed points also reduce customer loyalty points balance. Ensures that no points are earned for free gifts on a separate ticket. Calculation examples are provided below for each method: Method Purchase goods to earn points Redeem points Actual points earned Change in point balance Yes, set to 0 (default) No Yes

6 Customers: Getting Started Loyalty Codes 6 Method Purchase goods to earn points Redeem points Actual points earned Change in point balance No, set to 0 if fully pd pts and cash (fully pay tkt) 0-10 Yes, set to 0 if fully pd pts and cash (fully pay tkt) 0-10 A ticket is considered fully paid in points if the loyalty points are sufficient to pay the ticket s sub-total (excluding tax and miscellaneous charges). Tickets that have both earnings and redemptions can show up in both the earnings and redemption sections of the Customers / Reports / Loyalty point history report. When calculating points from Ticket history, the Customers / Loyalty programs / Grant loyalty points function takes into account the loyalty code s Reduce for redemptions method. 7. Disallow points on Sale prices To disallow points for items with sale prices. Price overrides To disallow points for items with price overrides. Both To disallow points for items with sale prices and for items with price overrides. To allow points for all items regardless of sale prices or price overrides, leave <blank> for None, 8. Use earning rules by Enter up to three methods for defining earning rules: Item To use earning rules by Item. Category To use earning rules by Category. Category/subcategory To use earning rules by Sub-category. To allow earning of points for all items leave <blank> for None. If you answer None, then the earning rules defined on this screen will apply to all merchandise sold. If you answer Item, Category, or Category/sub-category, then you can control which merchandise earns points by defining one or more earning rules on the Earning Rules screen for this loyalty code (described later). The Earning Rules screen allows you to define individual earning rules for specific items, categories, and/or sub-categories.

7 Customers: Getting Started Loyalty Codes 7 Earning rules are evaluated in the following order: Item Category/Sub-category Category If you specify multiple earning rule methods, the first earning rule found that applies to an item is used (e.g., an Item rule takes precedence over a Category rule). Camptown Sports does not awards points for all purchases, so they enter Category in this field and define an earning rule on the next screen for the item categories to be excluded from earning points. 9. Bonus points based on Sale amount To award bonus points based on sale amount. Quantity To award bonus points based on purchase quantity. If you don t award bonus points, leave <blank> for None. If you enter Sale amount or Quantity, a pop-up box appears for you to enter additional information. Camptown Sports runs a promotion every December to stimulate holiday sales. During the entire month of December, all purchases earn double points. To implement this promotion for 1998, Camptown Sports could define either of the following bonus point structures: Mult Enter the multiplier that determines how many bonus points to award. Bonus method Add to normal points Replace normal points To add bonus points to regular points earned. To replace regular points with bonus points.

8 Customers: Getting Started Loyalty Codes 8 Bonus on returns? Specify whether to subtract bonus points from the customer account for returned items by selecting Yes or No. If you answer Yes, both bonus points and regular points are subtracted from a customers account for returned items. If you answer No, only regular points are subtracted for returned items. If you run limited time promotions to award bonus points, you might want to answer No in this field to prevent the customer from losing more points than they earned. For example, if a Camptown Sports customer buys $10 of merchandise in November, that customer earns 100 points. If the customer returns that merchandise in December during the double points promotion, that customer would lose 200 points if you answer Yes in this field. However, if the customer both bought and returned the merchandise in December, the customer would earn 200 points on the purchase but would only lose 100 on the return. Bonus start date / time Enter the starting date and time for these bonus points. Leave <blank> or press F1 for None, if there is no start date or time for bonus points. Bonus end date / time Enter the ending date and time for these bonus points. Leave <blank> or press F1 for None, if there is no ending date or time for bonus points. 10. Dollar value per point Enter the dollar redemption value of each point. If points cannot be redeemed for merchandise, leave <blank>. Camptown Sports allows customers to redeem 200 points for $1 in merchandise, so the dollar value of one point is.005 (1 / 200). Min points This field displays only if you enter a number greater than 0 in Dollar value per point. Enter the minimum number of points that can be redeemed. Customers at Camptown Sports can redeem 200 points for $1 in merchandise, but they must redeem at least 200 points (i.e., a customer can t redeem 100 points for a 50 cent purchase). Camptown Sports enters 200 in this field. Allow split tender? This field displays only if you enter a number greater than 0 in Dollar value per point. Specify whether customers can split payment when redeeming points by selecting Yes or No. If you answer No, customers can only redeem points if they have enough points to cover all of the redemption-eligible items on the ticket. For example, if the ticket contains $100 worth of merchandise that may be paid for with point redemption, but the customer only has points equivalent to $75, then the customer can t redeem any of these points on this ticket.

9 Customers: Getting Started Loyalty Codes 9 If you answer Yes, the customer could redeem their $75 worth of points and pay the remaining $25 balance with any other tender. NOTE: This question applies only to splitting tender between points and other pay codes for those items that are eligible for points redemption. Allow redemption for tax? This field displays only if you enter a number greater than 0 in Dollar value per point. Specify whether points may be redeemed for taxes on a ticket by selecting Yes or No. If you answer Yes, customers can use points to pay the tax on a ticket as long as the ticket contains at least one item eligible for points redemption. If you answer No, customers are always responsible for paying the tax on a ticket, even if all of the merchandise on that ticket was paid for with redeemed points. For misc charges? This field displays only if you enter a number greater than 0 in Dollar value per point. Specify whether points may be redeemed for miscellaneous charges on a ticket by selecting Yes or No. If you answer Yes, customers can use points to pay the miscellaneous charges on a ticket as long as the ticket contains at least one item eligible for points redemption. If you answer No, customers are always responsible for paying the miscellaneous charges on a ticket, even if all of the merchandise on that ticket was paid for with redeemed points. Use redemption rules by This field displays only if you enter a number greater than 0 in Dollar value per point. Enter up to three methods for defining redemption rules: Item To use redemption rules by Item. Category To use redemption rules by Category. Category/subcategory To use redemption rules by Sub-category. To allow redemption of points for all items leave <blank> for None. If you answer None, then the earning rules defined on this screen will apply to all merchandise sold. If you answer Item, Category, or Category/sub-category, then you can control which merchandise is eligible for points redemption by defining one or more redemption rules on the Redemption Rules screen for this loyalty code. The Redemption Rules screen allows you to define individual redemption rules for specific items, categories, and/or subcategories. Redemption rules are evaluated in the following order: Item Category/Sub-category Category

10 Customers: Getting Started Loyalty Codes 10 If you specify multiple redemption rule methods, the first redemption rule found that applies to an item is used (e.g., an Item rule takes precedence over a Category rule). Camptown Sports does not allow customers to redeem points for all merchandise, so they enter Category in this field. On the Redemption Rules screen of this loyalty code setup (described later), they will define a redemption rule for item categories that cannot be paid for by redeeming points. Earning rules screen NOTE: If you entered None for Use earning rules by on the first screen of this loyalty code, you don t need to enter any earning rules here. The earning rules defined on that screen will apply to all inventory. 1. Calculate default points on All merchandise except To calculate points on all merchandise except the merchandise defined on this screen. Only merchandise listed To calculate points on only the merchandise defined on this screen. NOTE: To activate the earning rules defined on this screen, the appropriate entries must be made in Use earning rules by on the first screen of loyalty code setup. If you answer None to Use earning rules by, all of the earning rules on this screen will be ignored. Camptown Sports calculates points for most purchases, so they specified Category for Use earning rules by, and they enter All merchandise except in this field in order to define the item categories for which point earnings do not apply.

11 Customers: Getting Started Loyalty Codes Group Press: Up Arrow Page Up Down Arrow Page Down Home End Category Sub-category Item To move between existing earning rules. To define an earning rule that applies to a single category. To define an earning rule that applies to a single category/sub-category. To define an earning rule that applies to a single item. When an existing rule is highlighted, press F3 to delete this rule. Identifier Enter the category, category/sub-category, or item number for this earning rule. Description This field displays the description for this category, sub- category, or item, and can t be changed. Special rules Specify whether this category, sub-category, or item has special earning rules that are different from the rules defined on the first screen of this loyalty code by selecting Yes or No. If you answer Yes, a pop-up box appears for you to enter the special earning rules. Enter this information as described for the first screen. If you answer No, the rules defined on the first screen of this loyalty code will apply.

12 Customers: Getting Started Loyalty Codes 12 Redemption rules screen NOTE: If you entered None for Use redemption rules by on the first screen of this loyalty code, you don t need to enter any redemption rules here. The redemption rules defined on that screen will apply to all inventory. 1. Allow points to be redeemed for All merchandise except To allow points to be redeemed for all merchandise except the merchandise defined on this screen. Only merchandise listed To allow points to be redeemed for only the merchandise defined on this screen. NOTE: To activate the redemption rules defined on this screen, the appropriate entries must be made in Use redemption rules by on the first screen of loyalty code setup. If you answer None to Use redemption rules by, all of the redemption rules on this screen will be ignored. Camptown Sports allows points to be redeemed for most purchases, so they specified Category for Use redemption rules by, and they entered All merchandise except in this field in order to define the item category for which redemption rules do not apply.

13 Customers: Getting Started Loyalty Codes Group Press: Up Arrow Arrow Left Home Down Arrow Arrow Right End Category Sub-category Item To move between existing redemption rules. To define a redemption rule that applies to a single category. To define a redemption rule that applies to a single category/subcategory. To define a redemption rule that applies to a single item. When an existing rule is highlighted, press F3 to delete this rule. Identifier Enter the category, category/sub-category, or item number for this redemption rule. Description This field displays the description for this category, sub-category, or item, and can t be changed.