Every point a program issues is a claim a member can present later, so accountants record it the way they record any unearned obligation. Revenue tied to the points is deferred at issuance and recognized when the member redeems, or when the points expire unredeemed. For large programs the resulting liability is material enough to draw auditor and investor attention.
Sizing the liability is an estimation exercise. Finance teams model the cost of fulfilling a redemption, the rate at which members actually redeem, and expected breakage, the share of points that will never be claimed. Those assumptions get revisited as member behavior shifts, and a change in redemption patterns can move the liability without a single new point being issued.
Loyalty and finance teams manage the liability together through program design: expiry policy, the economics of the redemption catalog, tier structures, and how aggressively earn is promoted. A program that issues faster than members can reasonably burn is building balance-sheet pressure alongside its engagement numbers.
How GRAVTY handles this: GRAVTY records every earn, burn, and expiry event at the member and transaction level, so liability work starts from actual data rather than sampled estimates. WestJet's year-end rollover, a liability-sensitive close process, runs in 28 hours on GRAVTY, down from 10 days on Siebel.
