How Reward Points are Reedemed
Whenever a customer has a positive “Reward Points” balance, he/she can use points to apply a discount on a new purchase. The discount that is applied to the purchase is determined by the equation: [points used * conversion rate]
A customer may use some or all the points in his/her balance, up to the amount corresponding to the products being purchased.
ProductCart automatically calculates how much money the available points balance translates into and provides the customer with such information both in the account management area and during the checkout process.
Specifically, during the checkout process customers are prompted to indicate how many points they would like to use against a new purchase. A field is shown in the lower part of the order verification page (onePageCheckout.asp), as seen in the following screenshot from a v5 demo store:
New vs. Existing Customers
When a new customer is checking out, the current Reward Points balance is always equal to zero, and therefore the field shown above is never displayed. When an existing customer is checking out, the field is shown if the customer has a positive balance.
Points Redemption: 3 Scenarios
Customers can choose to use all, some, or none of the accrued points against the current purchase. The following is a description of the shopping cart behavior in these three scenarios:
- If customers elect NOT to use any points, they will earn points on the purchase. The amount of points that they earn is determined by the shopping cart content and will be displayed on the order verification page, which is shown immediately after the shipping option selection window.
- If customers choose to use some or all of their accrued points, they will receive a discount on the purchase that is equal to the number of points that they elect to use, times the conversion rate. They will not accrue any points on the purchase. If the customer enters a number of points that translates into an amount that exceeds the total for the products ordered, the system automatically calculates the minimum number of points necessary to obtain free products (total for the products ordered = 0), and deducts that amount of points from the customer’s points balance, instead of deducting the amount of points originally entered by the customer.
Consistent with how most e-commerce stores handle the sale of free merchandise (e.g. instant rebate that makes the order = 0), the discount is NOT applied to shipping, handling and payment fees, and taxes are added to the purchase if the store administrator opted to include shipping and other fees using the Tax Options in the Control Panel. In other words, customers will still have to pay for shipping, handling and other fees, and for any taxes calculated on those fees, even in a scenario in which accrued points allow them to receive a discount that covers the cost of the products ordered.
For example: assume that a customer were placing an order for products worth a total of $50, using enough points to receive a $50 discount, that shipping and handling charges amounted to $10 and that sales taxes were 5%, calculated on shipping fees too. The customer would end up being charged 0 for the products, but would be charged for shipping ($10) and taxes ($10 * 5% = $0.50). The total for the order would be $10.50.
- If customers enter a number of points that exceeds their current balance in an attempt to receive a discount that exceeds the discount to which they have earned rights, the balance amount is used. So if a customer had 120 points in his account, but entered 200 in the accrued points input field during check out, the number of points used in the calculation would automatically default to 120 (the balance in the account).
When Reward Points cannot be Redeemed
The accrued points input field is NOT shown to a customer who is checking out:
- When the customer is a new customer, and therefore the points balance is zero
- When the points balance is zero. For example, a customer that has accrued points, but used all of them.
- When the customer is a wholesale customer and the program does not apply to wholesale customers. This is an option that can be set under General Settings.
- When the Reward Points system is turned off. This is also an option that can be set under General Settings.
Limitations with Reward Points, Gift Certificates and Discount Codes (Coupons)
Accrued Reward Points are calculated on the Gross Product Total. That is: coupons and gift certificates are not taken into account.
For example, if a customer is purchasing a product whose price is $30 and that grants 20 Reward Points, those points are accrued even if the customer uses a Gift Certificate or a Discount Code (Coupon) that reduces the order amount.
There is unfortunately no easy solution to this issue as Reward Points are not necessarily based on product prices (they can be overwritten at the product level), so it would be impossible to calculate by how much they should be reduced. You can edit the order and change the accrued Reward Points after the order has been placed (accrued Reward Points are not credited to a customer's account until the order has been processed).