'Separate target and earning transactions' is a setting available when configuring a program line that uses a targeted mechanism. In a targeted mechanism, multiple target bands can be configured and the resulting earning rate or amount will depend upon which band the qualifying transactions meet.
With 'Separate target and earning transactions' enabled, the transactions used to determine which band has been met are separate from the transactions that earnings are calculated against. This allows you to incentivize certain transactions, such as purchases of a new product, by offering a larger reward against other transactions, such as all products. When 'Separate target and earning transactions' is enabled, two sets of dimensions are available for selection - one that specifies what transactions will qualify for the targets and one for the transactions that earnings are calculated against.
When targets are non-retrospective, the rate or amount for each target band only applies to the transacted value that falls within that band's limits. For example, if the following two bands are configured:
and the target transactions amount to $250,000, then 1% will apply to the whole of the first band (200,000 - 100,000 = 100,000), and 2% will apply to the remaining transacted value that falls in the second band (250,000 - 200,000 = 50,000). If we were to calculate earnings on the target transactions, the total earnings would then be (1% * $100,000) + (2% * $50,000) = $2000.
Since the program line's earnings are separated from its targets, these rates need to be scaled to the earning transactions. Assume the earning transactions amount to $40,000; the earning transactions are only 16% as large as the target transactions, so the actual earnings will be 16% as large as those for the target transactions ($2000), which amounts to $320.