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Purchasing Power Parity

Understanding Purchasing Power Parity, how it works and why we use it.

Marisa Crowder avatar
Written by Marisa Crowder
Updated this week

πŸ“£ Please note: This feature is included in our Premium Plan. If you'd like to upgrade, please contact your Account Manager at Nectar.

What is Purchasing Power Parity (PPP)?

  • Purchasing power parity (PPP) is an economic practice that compares the purchasing power of various world currencies to one another to determine an exchange rate that allows you to buy approximately the same amount of goods and services in every country.

How does it work?

  • Each user inside of Nectar has a Country field in their profile. When that field is updated with the user's country, points are adjusted during redemption based on local purchasing power.

    • For example, 100 points in Switzerland might redeem for a reward priced
      differently than 100 points in another country, ensuring fair value for all.

  • The Country field can be added to all users via Bulk Upload or Bulk Actions.

This field can only be edited by an Admin of Nectar. If the field is blank, it defaults to the United States.


Frequently Asked Questions

  • Can PPP be turned on for only some countries in an account?

    • No. PPP is applied account-wide to maintain equity for all users.

  • Is PPP optional, or is it automatically applied?

    • PPP is optional. Contact your Nectar Account Manager to enable the feature.

  • What data does Nectar use to determine PPP adjustments?

    • Nectar uses a trusted third-party source that specializes in purchasing power data to ensure accuracy.

  • How often are PPP rates updated?

    • Rates are updated once per year.

  • Can Admins override or manually adjust PPP calculations?

    • No. PPP calculations are handled automatically and cannot be manually adjusted.

  • Will employees in different countries see different point values for the same rewards?

    • Yes. Based on the PPP ratio for their country, employees may see different point costs for the same item.

  • Does PPP affect HR or Finance budgeting?

    • No. All redemptions are charged in USD, so total company costs remain the same.

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