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Definition: Redemption

Redemption refers to making use of sales promotion techniques like loyalty cards, coupons etc. to receive discounts or free gifts. It is a commonly used technique in supermarkets and retail chains whereby the customer is able to redeem the points he has collected through previous shopping experiences (usually at the same retail store or its branches, for a discount or free gift or a purchase of his/her choice(proportional to the points collected).

The main aim of redemption is to increase loyalty among customers through repeat purchase. Usually, a certain number of points may have to be collected before the customer is eligible for a free gift (Say, shopping worth Rs1000 will give someone 10 points and they may need to collect 100 points for a free gift). Thus, the consumer will shop for higher amounts more frequently, thereby increasing sales at the store.


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