Loyalty Points / Rewards Dollars - Introduction
If you activate the Loyalty-Rewards module, your customers can earn loyalty points (or rewards dollars) based on a percentage of the purchases they make.
Before you activate the program for real, you will be able to test out different configurations and run simulated reports to evaluate how many points customers would have earned based on previous sales histories. That will help you determine what percentages and settings to use going forward.
From the Maintenance Menu, choose Loyalty Rewards Points and Configuration to activate and establish your preferred settings.
Different inventory major class codes can be set to accrue points at different rates and some can be set to not accrue points. E.g. Rings could be set to earn points at 2% of purchases and loose diamonds could be set to 1% and warrantee watch repairs could be set to 0%.
Here's an extract of a report. It shows that Ruth has spent 20,045.95 on items eligible for rewards and the value of the rewards totals 251 of which 20 have been used with a balance of 231. She may have had other ineligible purchases and the rewards earned are calculated on an item-by-item basis, each of which could have a different earnings rate.
Typically, the points are valued at $1 each so a $1000 purchase at an earnings rate of 2% would provide 20 points, worth $20. However, it's possible to make points worth less than $1. E.g. points could be earned at 20% so that $1000 yields 200 points and they could be configured to be used at a rate of 10% (10 points per dollar) so the 200 points would be worth the same $20.
To use points, you will add a Points Redeeming Sku to the sale with a price and a negative quantity. This Sku will be in a major code dedicated for Points Redemption.
Note that this will have the effect of reducing the total sales, somewhat like a discount, which will reduce the gross profit - which many jewelers would prefer. I.e. the use of points is not like declaring sales in full with points applied as a form of payment. It is possible, but unlikely, that points would be set as taxable. I.e., if you set points as taxable, then applying $100 in points where the tax rate is 6% could reduce the sale total by $106. Ask your accountant or tax board for guidance if you plan to set them as (negative) taxable.
Some Jewelers might prefer that points be a form of payment, and that option might be considered in future versions of Shopkeeper. (Even if it increases gross profit, those jewelers might separately deduct the points to lower profit in their accounting for income tax purposes.)
Note that changing the accrual / earning and redemption percentages will affect previous sales, not just new sales after the change. This can be useful when evaluating your program, because you could change the rates, then retroactively do test calculations for points for any time-frame, e.g. for the prior year or more. That way you could model how many points would have been earned by your customers at different rates.
By contrast, changing the rates after you have started the loyalty program would cause Shopkeeper to reflect different points balances than the values printed on customers' previous receipts.
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