How Rewards Triggers, Redemption & Settlement Actually Work
Rewards Are a Multi-Stage System
A complete rewards system spans multiple stages. Each stage must function correctly for the system to remain reliable and cost-effective.
The core stages are:
- Trigger
- Issuance
- Redemption
- Settlement
Failures often occur at the boundaries between these stages.
Stage 1: Reward Triggers
Triggers originate from product events such as:
- transactions
- repayments
- usage milestones
Triggers must be:
- deterministic
- idempotent
- logged for audit
Poor trigger design leads to duplicate rewards and leakage.
Stage 2: Reward Issuance
Issuance assigns value to a user. This may involve:
- selecting a reward type
- assigning denomination
- reserving inventory
At scale, issuance systems must handle concurrency and retries safely.
Stage 3: Redemption
Redemption converts stored value into usable value.
Key considerations include:
- real-time vs delayed redemption
- partner availability
- retry handling
- user support visibility
Redemption is the most user-visible failure point.
Stage 4: Settlement & Reconciliation
Settlement ensures:
- partners are paid correctly
- internal ledgers match redemptions
- breakage is accounted for
- audits can be completed
Manual settlement processes do not scale.
Why Lifecycle Visibility Matters
Teams that lack visibility into the full lifecycle struggle with:
- unexplained cost spikes
- unresolved user complaints
- delayed settlements
- internal trust issues
Infrastructure systems centralise lifecycle visibility.
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