How Much Should You Bonus on a Membership Recharge | Maitu
A 200 bonus on a 1,000 recharge does not cost you 200. It costs the marginal cost of the extra visit. Use this method to set a safe bonus range, plus three rules for prepaid balances.
A recharge bonus does not cost you its face value. It costs the marginal cost of the extra visit. At a 35% marginal cost rate, a $200 bonus on a $1,000 recharge costs about $70, or 7% of the cash received. Set your bonus from your own marginal cost rate, not from what the shop next door offers.
Most prepaid memberships get priced by imitation. Someone down the street offers $300 on a $1,000 top-up, so you offer $350. Nobody runs the numbers against your own cost structure.
This page walks through the three calculations that actually determine what you can afford to give away. It applies to salons, spas, clinics, gyms, and independent retailers selling prepaid packages. If you operate in mainland China, note that prepaid cards are regulated as single-purpose commercial prepaid cards, and larger issuers must register with local commerce authorities. See the FAQ for detail.
Why this happens
Three errors compound.
The bonus looks like a cash expense. Owners book the $200 bonus as a $200 cost. The real incremental cost is the variable cost of one extra visit, usually 20% to 45% of face value depending on the industry. Miss that and every downstream number is wrong.
The discount rate uses the wrong denominator. Dividing the bonus by the amount paid overstates the giveaway. $500 on $1,000 looks like 50% off. The customer can spend $1,500, so the true figure is 33.3%. Compare yourself to competitors using the wrong number and you will always feel behind.
Prepaid balances get treated as revenue. This one does not misprice the offer but it destroys the business later. Unredeemed balances are a liability. Spend them and you have nothing left when customers show up to redeem.
How to fix it
1. Calculate your marginal cost rate
Work out what it costs to serve one additional customer. Include consumables, commission, disposables, and utilities. Exclude rent, salaried payroll, and depreciation. Those do not move when one more person walks in.
Marginal cost rate = marginal cost ÷ average ticket
A $200 ticket with $70 of variable cost gives a 35% rate. Industry averages are useful only as a sanity check. Pricing off someone else's average is how the mistake starts.
2. Calculate net contribution after the bonus
Let P be the recharge amount, X the bonus, r the marginal cost rate, and F the fixed cost allocated to P of spending.
Spending delivered = P + X Marginal cost = (P + X) × r Net contribution = P - (P + X) × r - F
With X at zero, net contribution = P × (1 - r) - F. Solve for the X that drives net contribution to zero. That is your ceiling. Anything above it loses money on that customer.
3. Add the cash flow benefit of a longer redemption window
Prepaid cash is interest-free working capital. A rough value is 0.5% to 1% of the balance per month, based on what small businesses typically pay for short-term financing. Stretching redemption from two months to twelve months recovers several points of margin.
Read all three together. Marginal cost alone understates what you can afford. Cash flow alone overstates it.
The numbers
Illustrative model only. Assumes a $200 average ticket, a 35% marginal cost rate, and $300 of fixed cost allocated per $1,000 of spending. Substitute your own figures.
Bonus | Giveaway rate (bonus ÷ total spendable) | Extra marginal cost | Net contribution | Share of no-bonus case |
$0 | 0% | $0 | $350 | 100% |
$100 | 9.1% | $35 | $315 | 90% |
$200 | 16.7% | $70 | $280 | 80% |
$300 | 23.1% | $105 | $245 | 70% |
$500 | 33.3% | $175 | $175 | 50% |
$800 | 44.4% | $280 | $70 | 20% |
$1,000 | 50.0% | $350 | $0 | 0% |
At a 20% marginal cost rate with everything else unchanged, the ceiling moves from $1,000 to roughly $1,700. That gap is why benchmark numbers do not transfer between industries.
Mistakes we see most
Common approach | Better approach |
Match the competitor's bonus | Set the bonus from your own marginal cost rate |
Divide bonus by amount paid | Divide bonus by total spendable amount |
Book prepaid cash as monthly revenue | Record as deferred revenue, recognize on redemption |
Let the bonus apply to every service | Restrict it to low marginal cost services |
No expiry on bonus credit | Set an expiry, convert to points rather than cash |
State non-refundable on the terms | Publish a clear refund policy, non-refundable clauses are generally unenforceable |
FAQ
How much should I bonus on a recharge?
10% to 30% of the recharge amount works for most small businesses. Industries with a marginal cost rate below 25% can go higher. Above 40%, stay under 20%. The test is net contribution staying positive, not the percentage itself.
Is a recharge bonus better than an outright discount?
Usually yes, provided the extra visit actually happens. A $1,000 recharge with a $200 bonus gives you cash today plus a committed return visit. A flat 20% discount costs the same margin and buys no commitment. If the customer never redeems, both are equally good for you, because you already hold the cash.
An unredeemed balance looks like free money. Is it?
It helps cash flow and does nothing for profit. The balance stays a liability until redeemed or until breakage rules let you recognize it, which is a narrow accounting test rather than an assumption you can make. Large dormant balances also carry refund obligations and, in some jurisdictions, unclaimed property reporting.
Are there rules I should check before selling prepaid packages?
Yes, and they differ by market. In the United States, the federal CARD Act sets a five-year minimum validity for gift cards and restricts fees, while states add unclaimed property rules. In mainland China, single-purpose commercial prepaid cards require registration above certain issuance thresholds and carry mandatory refund obligations. Confirm the current rules with a local advisor before you scale a program.
Next step
Download the worksheet and enter your own ticket price, marginal cost, and fixed cost allocation. It returns your bonus ceiling and a break-even redemption window.
［👇Contact the customer service below to obtain it］
If your member data currently sits in three places, paper cards, a spreadsheet, and the point of sale, run a reconciliation first and find out how large your unredeemed balance actually is. That does not require new software.
［Contact Customer Service］
Membership software should keep principal and bonus credit as two separate ledgers, with independent rules for redemption, refunds, and expiry. That structure follows from the arithmetic above rather than from a feature list.
Recharge programs fix cash flow and visit frequency. They do not fix acquisition. If people are not finding you in the first place, solve that problem before you try to lock anyone in.