# Loyalty Framework (Small-Goods DTC)

## Program types

1. **Points-based**  
   Earn on spend and/or actions (sign-up, review, referral); redeem for discount, free ship, or product. Best when you want simple rules and easy communication. Suits low–mid AOV.

2. **Tier-based**  
   Levels (e.g. Member, Silver, Gold) by spend or points; each tier unlocks better earn rate, rewards, or perks. Best when you have a clear “heavy buyer” segment and want to recognize them.

3. **Hybrid**  
   Points to earn and redeem, plus tiers that multiply earn or unlock rewards. More complex; use when you have loyalty tech and enough volume to justify it.

## Tier design (if using tiers)

- **2–3 tiers** to start; avoid 4+ until you have data.
- **Thresholds**: Align to real behavior (e.g. “Silver = 2+ orders or $X in 12 months”).
- **Per-tier benefits**: Higher earn rate, exclusive reward, free ship, early access, or birthday reward. Keep differences clear and achievable.
- **No demotion** in year one if you can avoid it; or long grace period (e.g. 12 months) to reduce frustration.

## Earn rules (points)

- **Spend**: e.g. $1 = 1 point; exclude shipping or discounts if you want to protect margin.
- **Actions**: Sign-up (e.g. 50), first order (e.g. 25), review (e.g. 25), referral (e.g. 100). Cap actions per customer per year if needed.
- **Bonus events**: Double points on launch day or category; time-bound.
- **Cap per order**: Optional (e.g. max 500 points per order) to limit cost.

## Redemption

- **Value**: e.g. 100 points = $5 off; keep ratio consistent (e.g. 1 point = $0.05).
- **Minimum**: Min order to redeem (e.g. $25) and/or min points (e.g. 100).
- **Options**: Discount off next order (simplest), free shipping, free product, or gift card. Start with one or two.
- **Expiry**: Optional (e.g. points expire after 12 months of inactivity) to reduce liability; communicate clearly.

## Anti-abuse

- One account per person; no self-referral.
- No stacking with site-wide or category-wide sale unless defined (e.g. “points redeemable on full-price only”).
- Minimum order for redemption; max redemption per order if needed.
- Monitor referral and review rewards for fraud (same address, same card, fake reviews).