Development a New Concept of Redemption Point Model towards Genuine Profit Sharing

Abstract

Redemption point occurs when customers with the membership cards redeem their accumulated points with voucher, cash or discounts based on a reward chart pre-established by the firm. It is the most effective tool to attract customers to visit and shop at a business premises. However, many customers are lured by the promise of reward, but in fact it is in favour of the owners of business premises only. Not only that, even offered rewards points expire if not redeemed. Therefore we proposed a new model of redemption points that will give benefit not only to owner of the premise but benefit to the employee of the premises as well as to the customers. The proposed of redemption model is built by maximizing the value creation for the owner of the premise, employee and customers. Through these concepts, it can provide analytical solutions and sensitivity analysis to support Loyalty Reward Programme host’s decision making on rewards supply planning. Also, can lead to a universal redemption reward program.