How to Set the Value of Loyalty Points on Shopify

Quick Answer

Yes, setting the value of loyalty points means deciding what those points are worth at redemption, separate from how many points customers earn. Keystone Loyalty Rewards lets you configure this redemption value directly, so points translate into a specific discount, gift card amount, or reward at a rate you control.

Earning points and redeeming points are two different calculations, and mixing them up leads to a program that either overpays customers or leaves them with points that feel worthless. This guide focuses specifically on the redemption side.

We will cover how to decide what points are actually worth once a customer wants to use them, and how that value should connect back to your margins rather than being set separately without checking.

What Is the Value of a Loyalty Point?

The value of a loyalty point is what it converts to when redeemed, such as a specific number of points equaling one dollar off, or a set number of points that opens up a fixed reward. This is distinct from how many points an action earns, which is a separate setting entirely.

Who Needs to Set Point Redemption Value Carefully?

• Merchants who have set an earning rate but not yet decided redemption value
• Stores wanting points to feel meaningful without giving away too much margin
• Businesses offering multiple reward types that need consistent point values across them
• Brands wanting to avoid a mismatch between how easy points are to earn and how little they are worth
• Anyone confused about the difference between earning rate and redemption value
• Stores planning a points-based promotion who need a stable baseline value first

Why Redemption Value Matters for Your Business

• A mismatch between earning ease and redemption value frustrates customers
• Redemption value directly determines your actual cost per reward given out
• Consistent point values across reward types avoid customer confusion
• Getting this right protects margin while still making rewards feel worthwhile
• A clear redemption value makes it easier to explain the program in simple terms
• This value should be checked against your earning rate, not set independently
• Customers notice quickly if points feel disconnected from anything meaningful

How to Set Loyalty Point Redemption Value on Shopify

Step 1: Define Your Loyalty Goal

Decide the actual dollar value you want points to represent before configuring any reward. This is the number everything else should connect back to.

• Decide how many points should equal a specific dollar amount off
• Check this value against your already-configured earning rate for consistency
• Confirm the resulting redemption feels achievable within a reasonable number of purchases

Step 2: Install and Configure Keystone Loyalty Rewards

Install Keystone Loyalty Rewards and configure redemption value based on your planned dollar equivalence, checking it against your existing earning rules.

• Connect the app to your Shopify store
• Set redemption value for your chosen reward types
• Confirm the suggested setup matches your planned dollar equivalence

Step 3: Create Earning Rules and Rewards

Apply the redemption value consistently across every reward type you offer, so a set number of points always means the same thing to a customer.

• Set the point cost for a discount reward based on your decided value
• Set the point cost for a gift card reward using the same underlying value
• Set the point cost for free shipping or a free gift consistently with the others

Step 4: Add the Loyalty Experience to Your Store

Show the redemption value clearly wherever customers see their points, so they understand what their balance is actually worth.

• Display how many points are needed for each reward in the customer account
• Show the redemption value on the storefront loyalty widget
• Explain the value clearly if you send any loyalty-related emails

Step 5: Test the Program

Test the redemption value in practice by actually redeeming a reward with a test account.

• Redeem a discount reward and confirm the applied amount matches your intended value
• Redeem a gift card reward, if included, and confirm the amount is correct
• Check that redemption value displays consistently across every reward type

Step 6: Go Live

Before launch, confirm the redemption value still holds up once you have seen it applied to real test redemptions.

• Confirm redemption value is consistent across all reward types
• Check that the value feels fair relative to how easily points are earned
• Review whether the messaging around point value is clear to a new customer

Setting Point Value Examples

Industry: Beauty brand
Problem: Points were easy to earn but the redemption value made rewards feel almost worthless to customers.
Setup: The brand adjusted the redemption value so a typical customer could reach a meaningful discount within a few purchases.
Result: Customers perceived the program as worth participating in rather than symbolic.

Industry: Furniture retailer
Problem: Different reward types had inconsistent point costs relative to their actual value.
Setup: Point costs across discounts, gift cards, and free shipping were recalculated to reflect one consistent underlying value.
Result: Customers could compare reward options without one option clearly being a better deal than another by accident.

Read more case studies for our apps.

Best Practices for Setting Loyalty Point Value

• Decide redemption value based on a clear dollar equivalence, not a guess
• Check redemption value against your earning rate for overall consistency
• Apply the same underlying value across every reward type you offer
• Make the redemption value easy for customers to understand at a glance
• Test actual redemptions before launch to confirm the numbers work as intended
• Avoid setting redemption value so high that rewards feel unreachable

Summary

Setting the value of loyalty points on Shopify means deciding what points are actually worth once a customer redeems them, and checking that value against how easily points are earned. Keystone Loyalty Rewards lets you configure this redemption value directly across every reward type, but the underlying number should come from your own calculation.

If you want loyalty points with a redemption value that actually makes sense, the Keystone loyalty app gives you the tools to set and test it properly.