Here's an example to help you understand:
Suppose you have an August use year and an annual allotment of 200 points. Since you didn't need all of your 2007 use year points, you banked 100 of them into your 2008 use year. You decide to make a reservation for January 2009 that requires 350 points.
Your 2008 August use year runs from 8/1/2008 through 7/31/2009, so that January 2009 vacation will fall within your 2008 use year.
To make the reservation, you use the 100 banked points (from 2007), all of your current use year points (from 2008) and borrow 50 points from your 2009 use year.
In November 2008, you cancel the January vacation. All 350 points go back into your 2008 use year. They can now be used to schedule other vacations that fall within your 2008 use year.
The 50 points that you borrowed from 2009 will expire at the end of your 2008 use year. So do the 100 banked points (from 2007 use year). If you don't use them by 7/31/2009 (end of your 2008 use year), they are forfeited.
The 200 current use year points (from 2008) also expire at the end of the 2008 use year, but since November is still within your banking deadline, you may bank them if you have no plans to use them before 7/31/2009. If you bank them, they will become good for stays in your 2009 use year, which goes from 8/1/2009 through 7/31/2010.
Now let's suppose the same situation except you didn't cancel the January vacation until late December (which was 30 days or less prior to scheduled arrival). The points are still returned to your account, but they are in "holding account" status. That means they all expire at the end of the 2008 use year, even the 200 current use year points. It also means that they can only be used to make a reservation for a stay that will occur 60 days or less from the day you call for the reservation. Since availability is often very limited once the 60 day mark arrives, it can be difficult to use the points before they expire.
HTH.
