Points are a discount with extra steps

The costume is the problem

Holafly pays members in HolaCoins. Purchases and referrals also add Level Points, which move members through its status levels. That is one rewards currency plus a separate status measure, and you need to understand both before you know what you are getting.

Airalo is cleaner about it. Four membership levels are set by spend, paying Airmoney cashback from 5% at entry to 10% at Platinum. No second status currency, just tiers and a rate.

Different mechanisms, same underlying offer: cashback in a costume. My view is that the costume is the problem, not the cashback.

For what that looks like across five real orders, see our Passport Club worked example.

What a points balance actually is

To the customer, a balance looks like ownership. You earned it. It is yours. It is sitting there waiting.

To the business it is an obligation. Depending on the programme design and accounting treatment, a loyalty option can be a separate performance obligation and part of a contract liability under IFRS 15. A points programme also carries something a plain discount does not: an adjustable exchange rate. When the programme gets expensive, the number of points people hold may stay the same while the reward price changes.

Anyone who has watched a flight redemption quietly reprice knows how that feels. My read is that the instinct has spread beyond airlines, and plenty of customers now treat a points balance as a promise with a footnote. I cannot put a number on that, but it matches the way people talk about loyalty schemes when you ask them.

If that is right, you are building retention on a mechanism some customers have already learned to discount.

The category is moving anyway

Open Loyalty’s 2026 trends report puts gamification and experience-based rewards near the top of the current loyalty agenda. It also reports that 81% of consumers are interested in visual progress tracking.

What we built instead

At The SIM Shop we shipped Passport Club with no customer-facing currency.

You collect destination stamps. Six ranks run from First Stamp to Passport Bro. You move up on whichever condition you reach first, so qualifying order count, eligible spend, unique destinations and the group-order route are separate ways in. The system runs on a rolling 365 days, with a 30-day protection period before demotion.

I want to be precise about the difference because it would be easy to overclaim. Two of the three redeemable rewards reduce a checkout. Signal Boost gives up to A$15 off a bigger fixed-data plan for a destination already bought. Choose-Your-Drop gives up to A$10 off an eligible future order. Landing Rescue is an emergency data pass that can be redeemed automatically for an eligible destination from My Account after the customer reviews and confirms the exact plan. All three are self-service for the signed-in customer and none waits for manual approval. We did not replace money off with experiences. We still give people money off.

What we removed is the currency. No balance, no conversion and no exchange rate to quietly adjust. A threshold has either been met or it has not, and we publish the thresholds.

Thresholds, reward limits and availability can still change. The difference is that changing them means visibly changing the published rules, rather than repricing a redemption table that few people were watching.

Where it is weaker

Rank takes longer to feel like anything than points do.

A balance gives you a number that moves on the first purchase. Rank gives you nothing visible until you cross a line. That is a real cost, and it gets worse the less often people buy in your category. If customers purchase twice a year, rank progression can feel like nothing is happening for six months.

We handled it by putting the first reward at the first qualifying order, so something reaches the account quickly. If you are weighing this model up in a genuinely low-frequency category, be honest about whether status will ever feel earned, or whether you have simply built a slower discount.

The bit that actually decided it

This was not ideological.

Airalo’s top tier pays 10% back. We are not beating that with a bigger percentage, and neither is most of the market. Competing inside someone else’s currency, against a larger balance sheet, is a game you lose slowly.

The question stopped being “what rate do we offer” and became “what do we want customers to believe about us”. Cashback says we will pay you a bit to come back. Nothing is wrong with that, and at 10% it is a good offer. It is just not something we can say better than the incumbent.

We would rather say something else and wear the fact that it takes longer to land.

Read the full Passport Club rules and rewards.

Sources

Holafly Rewards, Airalo Loyalty Program, Open Loyalty 2026 trends and IFRS 15. Sources checked 29 August 2026.

This is a commercial opinion piece, not accounting advice.