Breakage is the portion of earned loyalty points that is never redeemed — because points expire, accounts lapse, or balances are abandoned. Traditional loyalty economics quietly depend on breakage: the program’s cost model assumes a meaningful share of its promised value will die unclaimed.
Breakage is why most programs have expiration dates: forfeiture is a funding source. The alternative is structural — pre-fund the liability. When every redemption is pre-funded by a dedicated suspension account before points are ever earned, the program does not need points to expire to stay solvent, and can promise that points never expire.