Should Loyalty Points Expire? What the Research Says

By Alva Chew · Updated 2026-11-04

In short For a small shop, the safer default is that points do not expire while a member is active, and lapse only after a long stretch with no earning or redeeming. Research is mixed: a 2017 study found expiry can lift purchases only for flexible customers, and a 2021 hotel study found it makes customers angrier than losing status. If you do add expiry, tell members the date on the card and remind them before it happens.

Why do businesses expire loyalty points at all?

Points you have issued are a promise to give something later. The more points sit unspent, the larger that promise looks on your books. Expiry puts a limit on it. A date also gives members a reason to act before they lose their balance.

The cost is that you are taking back something a customer thought they had earned. That is where the research and the rules start to disagree with the accounting. Our page on points liability covers the accounting side. This page covers the customer side.

What does the research say about expiry?

Three academic studies speak directly to the question. They test different things, so read them as a set rather than a verdict.

Study	What it tested	Finding
Breugelmans and Liu-Thompkins, Marketing Letters, 2017	Real program data and a lab experiment on stricter expiry	Stricter expiry can increase purchases, but only for customers who can adapt their behaviour. The two sources of flexibility were usage level and shopping at multiple stores in the program
Dorotic, Verhoef, Fok and Bijmolt, International Journal of Research in Marketing, 2014	3,094 members of a program with no expiry, who chose when and how much to redeem	Deciding to redeem raised purchases before and after, even when members redeemed a fraction of their points. The authors advise firms to avoid point expiry and binding thresholds
Shin and Casidy, Journal of Services Marketing, 2021	Three hotel experiments comparing point expiry with status demotion	Point expiry caused more anger and a stronger sense of a severe problem than status demotion. Extending points reduced perceived unfairness better than extending status

Source: abstracts as published. Breugelmans and Liu-Thompkins 2017, Dorotic et al. 2014, Shin and Casidy 2021. We read the abstracts, not the full papers.

Two limits matter for a small business. The 2017 study found a gain only among customers with room to change their habits. A customer who visits twice a month has little room to buy more before a deadline. And the 2021 study used hotels, so a café or shop owner should treat it as a signal about feelings, not a measurement of sales.

What do big programs do?

Starbucks publishes its terms, and they show expiry used with exceptions. The terms we read were effective 10 March 2026.

Member level	What the terms say
Green	Stars expire six months after the calendar month in which they were earned. A member can extend them by one month with a qualifying purchase, a reward redemption or a digital reload of US$30 or more in the month before expiry
Gold and Reserve	Stars do not expire while the member keeps that status
Any account	With no Stars earned for two consecutive years, Starbucks may unregister the account and any accrued Stars become void

Source: Starbucks Rewards Terms of Use, effective 10 March 2026, as read on 4 November 2026.

A large chain with an app can run a six-month clock because it has frequent visits and an app that nudges. A single shop with a weekly regular has fewer chances to remind anyone. Copying the clock without the reminders is how members end up surprised.

Is it legal to expire points?

In many places no law addresses it, so the question is about fairness and your own terms. Some regions go further. Ontario, Canada, is a clear example.

Ontario’s business guide says rules that came into effect on 1 January 2018 stop reward points from expiring based only on the amount of time. Points can still expire when a program closes accounts that stay inactive, where the membership agreement says so. The rule does not protect points that cannot be redeemed for any single item over $50. A voucher issued as a reward counts as a gift card and cannot expire.

Source: Ontario, Business guide to consumer protection, “Some points can’t expire”, read 4 November 2026. The guide describes the rules in force when it was published, so check the current text for your province.

If you trade in more than one country, the safest design is the one that works under the strictest rule you face. That points toward inactivity-based expiry with clear notice.

What happens to the accounts when points expire?

Expiry matters for revenue timing. Under IFRS 15 and ASC 606, a business that can reliably estimate breakage, the points that will never be redeemed, recognises it in proportion to the points that are redeemed. A business that cannot estimate it waits until redemption is remote, for example at expiry. Our breakage page walks through a US$ example with the standards’ own references.

Many small shops use simpler local rules, so ask your accountant. The practical point is that you do not need expiry to account for points you expect to go unused.

What should a small shop do?

Start from the customer’s view. A member who earned 400 points over six months of coffees will remember the balance, not the policy. Losing it feels like a fine. The 2021 anger finding and the 2014 advice to avoid expiry both point the same way. Our guide to why customers ignore loyalty programs lists what else drives people away.

A default that holds up:

No fixed clock. Points stay valid while the member earns or redeems.
Expire only on long inactivity. Pick a period you would be comfortable explaining to a regular, such as 12 months with no earning or redeeming. This is our suggestion, not a researched standard.
Say it where members join. Put the rule on the sign-up screen and on the card.
Warn before it happens. Tell the member the date at least a month ahead, and let any purchase reset the clock.
Never cut the value of points already held. Change rules for new points, not old ones.

If your real worry is a growing pile of unspent points, expiry is a blunt fix. Look at the reward first. A first reward that is close, priced in dollars, and easy to name gets redeemed. See choosing rewards your customers will actually redeem and how to set your points earn rate.

How does expiry compare with other loyalty mechanics?

Stamp cards, tiers and vouchers each add their own clocks and conditions: a card that expires, a status that resets each year, a voucher with a use-by date. A member has to learn each one. A plain points balance with one stated inactivity rule gives the owner less to explain at the counter and the customer less to remember. The case for points-only loyalty sets out why we favour that.

How Gimify fits

Gimify keeps one points balance across every outlet, shown on the member’s Google Wallet card. The 2017 study named multi-store shopping as a source of flexibility, so a shared balance gives members more places to earn and spend. Gimify is free for one outlet, and US$99 a month covers unlimited outlets.

Questions owners ask

Should loyalty points expire?

For most small shops, not on a fixed clock. Let points stay valid while the member keeps earning or redeeming, and expire them only after a long period of no activity. Whatever you choose, state it plainly where members sign up.

Does expiry make customers spend more?

Sometimes. Breugelmans and Liu-Thompkins (Marketing Letters, 2017) found a stricter expiry policy can raise purchases, but only for customers able to change their behaviour to meet it. Dorotic and colleagues (2014) studied a program with no expiry and advised firms to avoid it.

Is it legal to expire loyalty points?

It depends on where you trade. Ontario, Canada, has stopped points expiring on the passage of time alone since 1 January 2018, with exceptions such as inactive accounts. Many places have no such rule. Check the consumer law where you operate.

How long should loyalty points last if they do expire?

There is no researched standard. Starbucks lets Green members' Stars lapse six months after the month earned, with a one-month extension for activity. A small shop that wants expiry can instead use inactivity, for example 12 months with no earning or redeeming, and give notice first.

How do expired points affect my accounts?

Under IFRS 15 and ASC 606, a business that can estimate breakage recognises it in step with redemptions. If it cannot estimate it, it waits until redemption is remote, for example at expiry. Ask your accountant how your local standard applies.