Distributing loot

To some loot is an integral part of their games, a chance to become more powerful, a chance to unlock new abilities, or a chance to get a powerful item with hidden powers. To others loot is merely a minor aspect of the game, perhaps even a distraction from the story, or an element that doesn't fit their character.
Loot can be a tricky thing to balance without thinking about those elements, let alone when you have to deal with them as well. Fortunately there are plenty of ways of not only making it easier, but they're also opportunities of doing some fun and/or story driven bits of game play.

This guide will focus entirely on immersing your party through their senses. The senses are what we use to enjoy the game after all, but there are some techniques that could make use of them in powerful and, perhaps more importantly, memorable ways. From giving bonus loot based on how the players complete their quests to giving out fake loot, and from giving nearly impossible to sell artifacts to giving cursed weapons, loot can be a highly entertaining element to play around with, as you'll hopefully find out in this guide if you haven't already.

Types of loot

Loot can usually be put into various categories, each of which offer their own advantages and disadvantages, and thus their own ways of having fun with them. But they also offer chances of being more diverse with the loot you give out. While monetary rewards are usually always appreciated, you can only give so many weapons or armor pieces before they're redundant or boring to receive.

Money

Monetary loot is an easy way of giving the players more resources, but in some cases it's a necessary reward as well. Players might need to buy resources, bribe guards, have spare change for acts of kindness, and so on. So handing out a monetary reward, either on its own or along other rewards, is usually always a good idea.

There's more fun to be had with money though. Money doesn't have to come in the form of whatever currency your universe uses, it could come in the form of precious stones and minerals, as well as other goods. I've lumped the other goods in the 'other' category further below, so let's focus on the gems and minerals for now.
Gems need to be appraised, buyers need to be found, their true value can be denied, weaker minerals could crack, they're easier to steal, harder to store, and generally just pose a bigger hassle than ordinary currencies.

So giving monetary loot in a form which might cause problems down the line is usually a great way of giving you opportunities to add character and/or lore driven encounters. A merchant who refuses to acknowledge the true price of a specific gem, a sneaky thief trying to pickpocket the party, a rough encounter that leads to the cracking of some of the gems and minerals, which in turn decreases their value, and so on. That thief, if caught, might offer valuable information in exchange for not being handed over to the authorities for example.

Gear

Gear is often a welcome reward as well, but you obviously can't keep giving gear after every encounter. It might work during the first stages when levels are gained quickly, depending on the gaming system of course, but at later levels you're often pretty solidified as a character and in terms of equipment.
Some might think simply giving stronger and stronger equipment could be a solution, which is true to some extent, but it makes balancing enemies a lot harder as well.
Of course gear doesn't necessarily have to be worn, it could be sold, disassembled, used to arm NPCs (non-player characters), and so on.

There's far more fun to be had with gear though. Gear could be broken and in need of repairing before its true potential is unleashed, gear could be cursed and give negative points instead, gear could be alive with a will of its own, gear could be a wrong size, gear could be a placebo and purely decorative, gear could already belong to somebody else, and so on.

Artifacts

Another type of loot is artifacts. By artifacts I don't just mean long lost scrolls of magic, divine weapons, or items tied to a prophecy, but also the more mundane, but still rare and sought after objects, like paintings, antiques, archaeological findings, religious symbols, and so on.

Artifacts offer perhaps the biggest opportunity of lore driven loot, but they're generally also a fairly uncommon occurrence. You wouldn't find artifacts on animals or common thieves for example, and even most dungeons are likely already explored and pillaged, but there's still plenty of ways to integrate them in some form.
Artifacts also pose a danger to the party, assuming word gets out of their possession of them of course. Plus finding an interested buyer could be a time consuming endeavor in and of itself.

Other loot

Lastly there's all the other types of loot, some of which could be divided further into other categories. I'm talking about intangible "loot", like knowledge, favors of people, favors of gods, reputation gains, (romantic) relationships, an assurance of safe passage, the saving or destruction of species, and so on. But also the more outlandish rewards one could come across, like a payment of cattle, a bed for the night, a piece of land, a means of travel, a life in any form (pet, friend, slave, etc.), parts of a creature (dragon scales, bear hides, etc.), and so on.
Before I continue I just want to point out that reward and loot are poor choices of words when it comes to the previously mentioned extinction of a species, slavery, and similar "rewards", but to those who play evil characters and/or campaigns this is part of the game.

I personally enjoy these other types of loot and rewards the most, since they're far less common, but also open up a huge array of possibilities for further development. A companion leads to character development, information leads to plot development, reputation gains lead to more reputation gains or losses, and so on.
They also offer opportunities of adding moral driven choices and story threads, which isn't for everyone, but definitely worth thinking about.

When?

Some of you, especially those new to running a game, might be wondering when to give out loot. The answer is simple: whenever you feel like it'd make sense. It's your game after all. But I know this isn't exactly an ideal answer, and there is more to it than just this.
Whenever you give out loot you add things to the economies. By this I mean not just the actual economy of the fictional world, but also the economy of player resources, the economy of game mechanics, and other, similar economies.
The more loot you give the more there is to deal with, especially if the loot is incredibly diverse, and has many uses. If the party is dressed in fancy equipment, each with their own powers, the players suddenly have a lot more to keep track of for example.

The economy isn't a huge deal when it comes to the when, but it's still worth keeping in mind. More loot could mean more work. So part of the answer to the when depends on the what you give.
But let's assume you stick to mundane items, gold, and so on, the when could still be once in a blue moon, after every encounter, or anything in between.

First think about what happens when you give out loot. The game stops for a moment, the party distributes the loot to some extent, the story itself makes way for the shiny items, and there's a general break in the game play. This break could be needed, perhaps even desired, but it can also break the flow of the game.
Figuring out whether the break is needed or not comes with experience, as well as knowing your players and their desires, and, in some cases, on your bladder. Some enjoy the looting process, some enjoy the little break, some prefer to keep going for hours upon end. Every group is different.

How much?

There's also the question of how much loot you might wish to give. The answer to this, as you may have guessed, is however much you feel would make sense. If your story universe is one of poverty, then your party likely wouldn't be rewarded with riches. If your party needs to pay for the upkeep of a military base they will need a lot of money.
If there aren't any deciding factors like this you'll have to once again look at the economy, but the actual world economy of your fictional world in this case. Consider what your party needs to buy in order to venture upon a quest or explore uncharted terrain, then use whatever the costs of this is as a guide to distribute wealth as loot.

You can then further tweak the challenge of everything by either adding or removing how much loot they can truly find. Perhaps they will always have enough to buy supplies, but have somewhat hidden chances of finding extras. Perhaps what they need is the absolute maximum they can earn, but if they fail to look in certain places they will miss out on that loot, and therefore lack some supplies on their next adventure.
There's a lot of challenge diversity that comes into play when dealing with loot. More loot generally means more resources, more resources can make the game easier, but could also mean more threats. Less loot means the loot they do get, especially more unique loot, is all the more special.

Chances for more

Offering opportunities to earn more loot, whether hidden or not, can be a great way of rewarding players and their characters in story driven ways. A quest completed beyond what the quest giver asked for might make that quest giver even more grateful, something they might wish to repay.
It can also come in the form of hidden caches, seemingly plain objects that hold tremendous value when shown to the right person, the value of keeping certain people alive (ransom, information, etc.), the offer of additional quests by the quest giver, hidden reputation gains from those secretly paying attention to the actions of the party (for better and worse), and so on.

Realism

Realism isn't exactly the highest priority in most game systems and worlds, but every system and every world does have rules of existence, so sticking to those when handling loot can help with making these worlds, and the characters that live in it feel more real.
A greedy king might try to haggle down the promised reward after the job's been finished by pointing out flaws, or perhaps consider the job completed incorrectly, and refuse to pay at all. A quest giver who was never actually seen in person might not show up to pay the fee at all. A grieving person who hired to party to act out their vengeance might give up far more possessions after the job's done, and they find out they want to be rid of the memories attached to some of their possessions.

But it also means some enemies and locations won't have some kinds of loot. Animals won't carry gold, sunken ships will have water damaged goods, and so on. There are still ways around this though. Let's assume you want to reward players with gold after an encounter with a bear, the bear obviously wouldn't carry the gold itself. However, the bear might've attacked or killed other people prior to its encounter with your party, which could've lead to a purse of coins being dropped during that attack.

There's another aspect to realism you might wish to keep in mind though. Let's say you want to reward your party with a fancy new laser pistol, this pistol could be rewarded after they've killed some bandits, right? Sure, but don't forget that whichever bandit is in possession of that laser pistol will likely use it against the party as well.
This element of realism isn't always an issue, and it can easily be avoided in many cases, but it's still worth keeping in mind.

Consequences

Another fun element to play around with are consequences of receiving specific kinds of loot, or rather the act of looting. I'm not talking about giving out cursed items, but that does work, I'm talking about the repercussions of taking items that technically don't belong to you, as well as taking valuable items.
Earlier I briefly touched the element of becoming a bigger target the more wealth you have (at least if you show it), but in some cases the loot could already belong to other people. Those chests of gold found hidden in the bandits' camp? Those were stolen from people in the nearby town. That fancy looking relic in that lost temple? You just desecrated a holy place, and the deity noticed.

Consequences become even more intriguing when the party has one or more lawful good or similar people. Some characters might not care about the consequences, but to some it goes against their nature to just take anything that looks valuable. Whatever their choice is, they could (and perhaps should) face the consequences, for better or worse.
That deity I just mentioned, if their relic is indeed taken they might work their powers against the party. If the temple was instead simply cleared from evil, perhaps even cleaned up a bit, that deity would surely reward the party for their kind efforts. Let's hope that deity isn't an evil one, or their act of kindness may turn out to be a curse instead.

Plans

I hope I've given you some fun ideas to play with thus far, but the main thing to take away from this guide is to think about the plans you have for your campaign, and the plans your players have for their characters.
If your players hope to one day have their characters buy a hangout, castle, bunker, or any other building they can call their (second) home, they're obviously going to need a lot of money, not just for the purchase of this building, but also for the upkeep. If instead they wish to remain travellers on the road, money won't be their biggest priority, and thus they likely won't be searching for loot all the time.

If you plan on having your party face off against a powerful enemy in a lengthy fight, perhaps giving them enough resources to prepare with might be a good idea. Whether they end up spending the money on supplies or not is their choice of course.
There's more you can plan for though. Just as having no money for a long period of time, and then finding a trove of treasures can make for a memorable moment, so too can being rich for a while, and then having it all taken away in a single moment. An evil NPC, unpaid taxes to a greedy overlord, coins turning out to be fake, these all make for moments the party will hate initially, but if they have a chance to get back the money they'll be very eager to continue playing. All players are different of course, some might hate this instead, so try to figure out what kind of players you're playing with.

Hall of fame

One final element you could play around with in terms of loot is a hall of fame in some form. The head of a demon lord could make a fine trophy for a wall, the very first weapon of each character might hold a special place in their heart, and be worthy of being displayed in a glass case in their den, a treasure map worthless after the treasure's been found still makes for a great decorative wall piece, and so on.

Giving the party opportunities to keep mementos not only gives everybody a chance to have an almost timeline-like place of memories, but it also makes sure some elements are kept in play. That demon lord head might turn out to be valuable to the magics of some necromancer, that treasure map might have hidden clues pointing to a bigger treasure, and those very first weapons might one day make a very touching gift.

Of course you'll need a place before you can turn it into a hall of fame, but it could be applied in different ways as well. That demon head could instead be hung above the city gates it once terrorized for example. It's worth checking to see if your players would be interested in something like this. It's all about the plans, remember?

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