One of the most common questions when launching a Qarrot program is:
“When do we actually pay for the rewards?”
This article explains how points, budgets, and funding work together.
Key Concept: Points ≠ Cost
In Qarrot, points themselves do not have a direct cost when they are awarded.
Costs are only incurred when employees redeem points for gift cards.
How the System Works (Step-by-Step)
1. Assign Giving Budgets
Admins allocate giving points to managers (or employees) using budgets.
Example: A manager receives 100 points per month
These points are used to recognize others
👉 No cost is incurred at this stage.
2. Managers Award Points
Managers use their budgets to:
Send recognitions
Run campaigns
Employees accumulate spending points as they receive recognition.
👉 Still no cost at this stage.
3. Employees Redeem Points
Employees redeem their accumulated points for rewards such as:
Gift cards
Donations
Custom rewards (if configured)
👉 This is when cost is triggered for specific reward types (see below).
4. Gift Card/Donation Rewards Are Deducted from Funding Balance
Admins maintain a rewards funding balance (prepaid pool of money).
When a gift card or a donation is redeemed:
The USD value of the reward is deducted from this balance
What Actually Triggers a Cost?
Funds are only deducted when employees redeem:
Gift cards
Donation rewards
👉 Other reward types (e.g., custom rewards fulfilled outside of Qarrot) do not deduct from your funding balance.
Example
Admin deposits: $50,000
Managers distribute points over time
Employees redeem rewards
If an employee redeems a $25 gift card:
→ $25 is deducted from the funding balance
Important Notes
✔ You are NOT charged when:
Points are assigned to managers
Points are awarded to employees
✔ You ARE charged when:
Employees redeem gift cards, prepaid cards, or donations
Why This Model Works
This structure allows you to:
Control budget allocation (via points and budgets)
Pay only for actual usage (via redemptions)
Avoid overpaying for unused rewards
What Happens to Unused Funds?
If you have remaining funds in your rewards balance when you terminate your subscription, you can contact your Account Manager to request a refund of the unused amount.
Best Practices
Deposit funds based on expected redemption volume, not total points distributed
Monitor your Rewards and Redemptions report regularly
Adjust budgets over time based on usage trends
Related Help Articles
Summary
Action | Cost Impact |
Assign budgets | ❌ No cost |
Award points | ❌ No cost |
Redeem gift cards / donations | ✅ Cost applied |
If you’re unsure how much to fund your account or how to structure budgets, your Account Manager can help you model this based on your program goals.