Think of your Item ID, Item Family, and Major Group as a hierarchy, moving from least to most specific. This is useful when creating redeemables/qualification criteria with groups in mind, i.e., Free Drink with purchase of Entree. The hierarchy functions as the example below:
Creating Group and Family ideas is particularly useful when creating qualification criteria, as you cannot stack modifiers (like using Item ID for "Coca Cola" and using the SKU for "Sprite"). Using the Item Family ID for "Soft Drinks" takes care of both of those items (and others as well).
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