Before launching a bonus program, set a budget for future discounts and calculate three scenarios: customers use none of the bonuses they earn, half, or all of them. For each scenario, determine net sales, gross profit and the amount remaining after variable expenses. This lets you assess the proposed earning rate before launch.
After launch, track sales financial results and bonus movements separately. Account for redeemed bonuses in the results of the corresponding sales, and include unredeemed bonuses when planning possible future discounts.
Set a budget and prepare the calculation data
Choose a planning period. Write down the amount you are prepared to fund for bonus discounts and the minimum amount you want to retain from a purchase after cost of goods and variable expenses. These are your management thresholds for assessing the proposed scheme.
Create a separate working spreadsheet for the calculation. Ask the employee responsible for bookkeeping to prepare the prices and costs of the selected products. The owner sets the budget, proposed earning rate and acceptable-result criterion.
- List the products you plan to include in the program.
- Record the selling price and cost of each product.
- Set the earning base, bonus percentage and discount value of one point.
- Specify the maximum share of the next purchase you propose to let customers pay with bonuses.
- Add variable expenses tied to a specific purchase and how they are calculated.
- Determine the planned volume of purchases on which bonuses will be earned.
Repeat the calculation for products with different costs. Do not rely on a single average basket: assess the proposed discount on specific products from your list.
Calculate the result after the bonus discount
Gross profit is net sales minus the cost of goods sold. Discounts and actual returns affect net sales and margin. Use amounts that already account for these transactions, together with the corresponding cost of goods.
Then subtract variable expenses. For an online order, managing these expenses affects the profit from the order. In your own calculation, list each expense separately so you can see how it changes after a discount.
Use this sequence in the working spreadsheet: net sales − cost of goods − specified variable expenses. Call the resulting amount the remainder after variable expenses. It is not the store’s net profit if the calculation does not include the other expenses.
Illustrative example: a 5% rate and a 5,000 UAH budget
All figures below are illustrative inputs. The owner plans 100 first purchases of 1,000 UAH each and sets a 5,000 UAH budget for future bonus discounts. The cost of goods in each purchase is 700 UAH. Under the proposed scheme, one point gives a 1 UAH discount. Assume that the 5,000 UAH budget covers only points earned on these 100 first purchases. The earning base is 100 × 1,000 = 100,000 UAH. With all earned points redeemed, the maximum earning rate within this budget is 5,000 ÷ 100,000 × 100% = 5%. At this rate, one first purchase earns 1,000 × 5% = 50 points.
The first purchase generates 1,000 UAH in net sales and 300 UAH in gross profit. In this model, the 50 points earned can provide a 50 UAH discount on the next purchase. For 100 first purchases, that is 5,000 points and possible future discounts of 5,000 UAH.
For the next purchase, set a price of 1,000 UAH before the bonus discount, a cost of 700 UAH, packaging of 20 UAH and a card payment fee of 2% of the amount actually paid. The maximum share payable with bonuses is 20%, or 200 UAH for this purchase. The 50 available points are within that limit.
To complete this separate calculation, assume that no new bonuses are earned on the next purchase and that there are no other discounts or returns. This is an assumption for the example. The table compares one next purchase in each of the three scenarios.
| Metric | None used | Half used | All used |
|---|---|---|---|
| Points used | 0 | 25 | 50 |
| Bonus discount | 0 UAH | 25 UAH | 50 UAH |
| Net sales | 1,000 UAH | 975 UAH | 950 UAH |
| Cost of goods | 700 UAH | 700 UAH | 700 UAH |
| Gross profit | 300 UAH | 275 UAH | 250 UAH |
| Packaging | 20 UAH | 20 UAH | 20 UAH |
| 2% fee | 20 UAH | 19.50 UAH | 19 UAH |
| Remainder after variable expenses | 260 UAH | 235.50 UAH | 211 UAH |
| Unused points | 50 | 25 | 0 |
If each of the 100 customers makes one such next purchase, the scenarios result in 0, 2,500 or 5,000 UAH in bonus discounts, respectively. Full redemption fits within the set budget. If the owner has also set a minimum remainder of 200 UAH from the next purchase, the result of 211 UAH meets that criterion.
With no redemption, all 5,000 points remain unused. With half redeemed, 2,500 points remain. Do not record this balance as savings in the next period’s budget: carry it into the calculation of possible future discounts. The assumption of 100 next purchases is not a forecast or evidence of the program’s effect on sales.
How to account for Torgsoft bonus system settings
To limit the share of a purchase that can be paid for with bonuses, you can enter a maximum percentage payable with bonuses in the Torgsoft cumulative discount bonus system. Use the selected limit in the financial spreadsheet and assess the purchase result based on the number of points available to the customer.
When a product is paid for with bonuses, new bonuses are earned on the portion of the price paid in money. Therefore, include these new bonuses among possible future discounts when calculating subsequent periods. The assumption in the illustrative example above that no new bonuses are earned does not describe this program behavior.
No bonuses are earned on a product with a product discount or when a wholesale price is used. Account for these exceptions when determining sales volume for planned bonus accruals. Keep the financial spreadsheet separate: it combines the selected budget, cost of goods and your expenses.
Reconcile the period’s actual results before setting the next budget
Assign a responsible employee and a reconciliation date. Ask them to collect actual net sales, the corresponding cost of goods and variable expenses for the period. Actual returns must be reflected in these figures. Do not subtract discounts or returns again if they have already reduced net sales.
In a separate part of the working spreadsheet, reconcile the opening bonus balance with points earned, redeemed, expired and unused. Enter actual adjustments and check the closing balance. For planning, convert unused points into a possible discount amount under the corresponding terms of use.
- Compare actual bonus discounts with the set budget.
- Recalculate how much remained after cost of goods and variable expenses.
- Carry unused bonuses into the next period’s plan.
- Add planned new bonuses and repeat the three redemption scenarios.
- Approve the next budget based on this calculation.
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