Paying Rewards in Gold Instead of Points: When It Works and When It Doesn’t

Short answer. Pay in gold when you want the reward remembered and the amount is small. Stay with points or vouchers when you need tight cost control, instant redemption inside your own product, or a fixed value.

Metal is the only reward currency here that can also fall. That is the trade, and this page is mostly about whether it is worth making.

The problem with your own points

Points are cheap to issue and easy to devalue. That is why finance likes them.

It is also why users discount them. Most people have watched an airline or a card programme quietly change the conversion rate.

Your points have three structural problems:

• They only mean something inside your product
• You carry a liability until they are redeemed
• Their worth is whatever you say it is next quarter

None of that makes points wrong. It makes them a loyalty tool rather than a reward with independent worth.

What RBI actually allows a voucher to be

This is the part most comparisons skip, and it is checkable.

Gift vouchers in India are prepaid payment instruments. RBI’s Master Direction on PPIs sets hard limits on them.

The rules that shape the reward:

• Maximum ₹10,000 per gift instrument
• Not reloadable
• Cash-out and funds transfer are not permitted
• Minimum validity of one year from the last load
• The issuer must warn the holder during the 45 days before expiry

So a voucher is capped, time-limited, and cannot be turned into money. Those are not vendor choices. They are the regulation.

The breakage myth, corrected for India

You will read that unredeemed vouchers are pure profit. In India that is largely untrue.

Paragraph 13.3 of the same direction says a non-bank issuer cannot move the outstanding balance to its profit and loss account for at least three years after expiry. If the holder asks for a refund after expiry, they get paid.

So the honest case against vouchers is not that someone pockets the money. It is simpler: your recipient gets something capped, expiring and unspendable outside a list of merchants.

What sending metal changes

Three things differ in practice.

It does not expire. There is no validity period to manage and no 45-day warning to send.

The recipient can leave with it. They can hold the metal, sell it, or take physical delivery. It is theirs rather than a credit against your catalogue.

No account is needed first. You send to an Indian mobile number. If there is no account, one is created when the reward lands.

That last point matters more than it sounds. Every onboarding step between a reward and its recipient is somewhere the reward dies.

The limits, plainly

• ₹1 to ₹50,000 per send
• ₹1,00,000 per day
• Gold or silver, priced in rupees or grams

For most cashback and referral programmes those ceilings are irrelevant. For high-value channel incentives they are not, and you should check before designing around them.

When metal is the wrong choice

Four cases where you should not do this.

1. You need a fixed value. Metal moves. If ₹500 must still be ₹500 in March, send something else.
2. The reward is meant to be spent in your product. A reward the user can walk away with is the opposite of a retention mechanic.
3. Very high frequency, very low value. Sub-₹10 rewards on every transaction are better as points; the ceremony of metal is wasted.
4. Your users want instant utility. Someone who wants a coffee today does not want a gram of silver.

There is also a compliance point worth knowing before you design the flow. Digital gold sits outside SEBI’s regulatory perimeter, which we cover in detail in what SEBI’s caution on digital gold actually says. If your legal team reviews reward instruments, they will ask, and the honest answer is that it is not a regulated instrument.

What it costs you

Be clear about the commercial shape, because it differs from the rest of the API.

You fund your own wallet with metal, then send from that balance. Sends from your own inventory earn no commission, because you already own what you are giving away.

So the case for this is not revenue share. It is:

• A reward people notice, in a category where most are ignored
• No expiry liability to track
• No onboarding funnel between the reward and the recipient

If you want the commission model instead, that applies to buys your users make, not to rewards you send. The two are separate.

How to pilot it without committing

A reasonable test takes a week.

1. Pick one trigger. A referral completion or a milestone, not your whole rewards catalogue.
2. Pick a small amount. ₹100 to ₹500 is enough to be noticed and cheap to be wrong about.
3. Run it against your current reward, same trigger, split audience.
4. Measure claim rate, not redemption rate. The number that matters is how many recipients engage at all.
5. Ask ten of them. Qualitative beats a dashboard at this sample size.

The engineering is two API calls once your wallet is funded. The gifting and rewards guide covers the quote and confirm sequence, and our integration guide covers the wider API if you are starting from scratch.

Common questions

Can I send gold to someone who has never used the app?

Yes. You send to an Indian mobile number, and an account is created when the reward arrives. There is no pre-registration step.

What happens if the metal price falls after I send it?

The recipient holds less value than when it left you. This is the real downside and there is no way to engineer around it. If a fixed value matters, metal is the wrong instrument.

Is this cheaper than gift vouchers?

We have not verified voucher platform pricing, so we are not going to claim it. What we can say is that there is no per-send fee on our side and no expiry liability to carry.

Do I earn commission on rewards I send?

No. Sends draw down metal you already bought, so there is nothing to pay you a share of. Commission applies to purchases your users make through your integration.

Is digital gold regulated?

No. It is not notified as a security and sits outside SEBI’s purview. Say so in your own terms rather than letting a recipient assume otherwise.

Can the recipient turn it into cash?

Yes, by selling the holding. That is the main structural difference from a gift voucher, which RBI does not permit to be cashed out.

What to take from this

Vouchers are capped, expiring and locked to a merchant list because RBI requires it. Points are worth whatever you decide next quarter. Metal is neither, and it can fall.

If your rewards are being ignored, the currency is worth testing before the budget is. Run one trigger for a week and count how many people claim.

This article is for information only and is not investment advice. Digital gold is not a regulated instrument in India and its value can fall as well as rise.