Expiry sets how long a program carries the promise behind each point. It drives breakage, the share of points members never redeem. It also decides whether a quiet member comes back to a balance or to nothing.
What are the main points expiry models?
Programs build on five basic models. The table shows each one with a live example from a program's own terms.
| Model | How it works | Example | Effect on the books |
|---|---|---|---|
| Fixed term | Each point expires a set time after it posts, whatever the member does | Wyndham Rewards: four years after the points post | Old points clear on a known date |
| Activity-based | The whole balance expires after a set time with no activity | World of Hyatt and Marriott Bonvoy: 24 consecutive months. IHG One Rewards: 12 months for Club members | Only lapsed members lose points |
| Rolling with extension | Points expire a set time after the month earned, and activity pushes the date out | Starbucks Rewards Green Level: six months after the month earned, extended a month at a time | Balances of light users stay short-lived |
| Status exemption | Elite members keep their points while they hold status | IHG elites, and Starbucks Gold and Reserve members | The best members' balances stay on the books longer |
| No expiry | Points never expire | Delta SkyMiles | Some points still go unused, and finance estimates how many |
Many programs combine models. Wyndham pairs its four-year limit with an 18-month inactivity rule. Starbucks pairs a rolling clock with an exemption for its higher levels.
How does points expiration affect breakage and liability?
Points that members have not used sit on the balance sheet as the points liability. Expiry is one way it ends. Ulta Beauty's annual report says it books loyalty revenue when members redeem points or points expire. Until then, it defers revenue based on the share of points it expects members to use.
That expected share is where the rule bites. Hyatt reported a $1,533 million liability for future point redemptions at the end of 2025. It says a 10% cut in its breakage assumption would add about $90 million. Any change to how many points expire moves that assumption.
Programs without expiry still have breakage. Delta tells members their miles don't expire. Yet its 2025 annual report still estimates how many miles will never be used, from past patterns. Its SkyMiles deferred revenue was $9.3 billion at year end. Our accounting guide shows how the math works.
What happens when a program changes its expiry rule?
Canada's Air Miles program shows what a reversal costs. In 2011, its operator announced a five-year expiry policy. The first miles were set to expire at the end of 2016. Members rushed to redeem as the date neared. Miles redeemed rose 60% in 2016.
Ontario then moved to ban expiry based on time alone. The operator cancelled the policy on December 1, 2016. It cut its breakage estimate from 26% to 20% and added $284.5 million to its redemption liability. It put $241.7 million of that down to the cancellation. Price both the rush and the legal risk before announcing a new clock.
Which laws limit points expiration?
Rules differ by market, and they change. Check the ones that apply where your members live.
Quebec's Consumer Protection Act bars loyalty points from expiring on a set date or by the lapse of time. Its regulation allows one way out. Points can expire after at least a year of inactivity, if the member gets a notice 30 to 60 days before the date. Programs where no single reward is worth more than $50 fall outside these rules.
Ontario amended its Consumer Protection Act in 2016 to bar expiry of rewards points due to the passage of time alone. Expiry for other reasons stayed allowed. A 2025 law re-enacts that section, so that expiry must follow rules set by regulation. The new section takes effect on a date set by order.
In the US, the federal gift card rule requires most gift card funds to last at least five years. It leaves out loyalty, award or promotional gift cards that say so on the front, along with the expiry date. California's gift certificate law has a similar carve-out for loyalty certificates with the expiry date printed on the front.
Congress is also looking at miles. A Senate bill from March 2026, S. 4244, would bar US airlines that run frequent flyer programs from putting an expiry date on miles. It was sent to committee. Our piece on loyalty program breakage covers what regulators are doing more broadly.
How does expiry change the member experience?
A clock can lift spending, but only for some members. A study in Marketing Letters used real program data and a lab test. It found a time limit on points can raise purchases. The lift showed up only in shoppers flexible enough to adapt. How much they used the program, and whether they shopped across stores, set that flexibility.
The lift did not reach members without that flexibility. For them, a short clock takes points away before a reward is in reach. Four habits soften the rule:
- Show the expiry date where members look. Starbucks lets members track their expiry dates in its app.
- Warn members before points go. In Quebec, the notice must land 30 to 60 days before the date.
- Count small actions as activity. Starbucks counts a digital reload of $30 or more, as well as purchases and redemptions.
- Exempt your best members, as IHG does for elites who keep their status.
How does an expiry change show up in the numbers?
For illustration, a retailer issues 100 million points a year, at a cost of half a cent each. Under a 12-month fixed term, its cohort data shows 30% of points expire unused. It expects members to redeem the other 70 million, a $350,000 liability for one year of points.
The team wants to switch to 24 months of inactivity. Finance models the new rule and expects breakage to fall to 18%. Expected redemptions rise to 82 million points, or $410,000. Each year of points now costs $60,000 more.
At a 30% gross margin, members must spend $200,000 more a year to cover that. The team runs the new rule on a test group first, and compares spend with a control group.
How GRAVTY handles points expiration
GRAVTY is the Loyalty Juggernaut platform. It runs expiry as part of the program model, next to benefits and family accounts. Its patented Visual Rules engine lets staff with no coding skills write earn, burn, tier and bonus logic. They test it in a simulation and go live without an IT ticket.
GRAVTY tracks the cost and value of every point issued and redeemed. That gives finance and loyalty teams the liability and breakage view they need. Teams can run what-if analysis on a rule change, and the platform produces an IFRS-compliant balance sheet. GRAVTY Agentic AI Compass lets a team ask why a metric changed, such as redemptions in the months before points expire.
Frequently asked questions
How long should a points expiry window be?
Long enough that members who stay active never lose points. Hyatt and Marriott allow 24 months without activity. Wyndham allows at least 18, and IHG gives Club members 12. In Quebec, an inactivity rule must allow at least a year. Match the window to how often members buy.
Can expired points be reinstated?
Only when the program or the law allows it. Hyatt's terms say forfeited points will not be reinstated under any circumstances. Marriott's terms say the same. Ontario's 2016 law made suppliers credit back points that had expired since October 1, 2016.
Do points expire when a loyalty program ends?
At Hyatt and Marriott, yes, after six months' notice. Hyatt and Marriott each promise active members six months' notice before ending the program. Points still unredeemed after that are forfeited.
What counts as activity to keep points alive?
Each program defines it, and the details matter. Hyatt counts holding a Hyatt co-branded credit card as activity. IHG says the free night its cardholders get each year does not count. Wyndham counts earning, or a redemption or transfer that changes the balance.
Do elite members' points expire?
Not at IHG or Starbucks, while the member keeps status. IHG says elite members' points do not expire as long as they keep elite status. Starbucks exempts Gold and Reserve members. Marriott protects Lifetime Elite members from losing points to inactivity.