The Rewards You Were Never Meant to Redeem
Loyalty points that never get redeemed are called "breakage," and under standard accounting treatment breakage gets booked as revenue, not written off as a marketing cost that failed to land. That single bookkeeping choice quietly flips the incentive underneath every loyalty program: a point redeemed is a liability paid out, while a point left sitting in an account is profit realized. Once finance treats non-redemption as the win, the people who design the point structure, the expiry rules and the "engagement" campaigns around them are being graded, whether they know it or not, on getting customers to care just enough to keep participating and not quite enough to cash out. This piece traces what that does to the working definition of engagement, and why the marketing team building the program and the finance team booking its results may be optimizing for opposite outcomes without anyone calling it that.