How Do Loyalty Cards Work?

Alon Zuck
January 30, 2021
3 min read
how loyalty cards work
Alon Zuck
January 30, 2021
3 min read

Loyalty is earned – not deserved. This is true in both the world and in business. So how can you create an effective points program that encourages customer retention, repeat purchases and creates loyal customers while making your clients feel valued? Let’s take a look at how loyalty cards work and the ways you can build customer loyalty with minimal effort.

What Is a Loyalty Card?

In the world of small business, a customer loyalty card is used to encourage customers to return to the store for repeat business. Whether its paper punch cards, a plastic card or a digital wallet, each time the customer makes a purchase it is recorded.


When they have achieved a certain number of purchases, or spent a specified amount they receive a reward. This reward system encourages customers to return time and time again. Attracting return customers is an easier way to increase revenue, as opposed to seeking new clients for every purchase.

What Are the Rewards?

The best part of creating a customer loyalty program for your small business is that you get to decide the rewards. It can be something as simple as a free coffee or product, or money off their next purchase. Either way, with your customer rewards program you are completely in control.


The benefit for you as the business owner, is that rewards are only achieved once the customer has already spent money with your business.

How Can You Track the Rewards?

There are several ways to make good use of your rewards program. You can run the scheme as a points program, where customers are awarded points with each purchase. These points accumulate and are then spent on a product or service. For example, 100 points can equate to a free manicure in your salon. It’s another way to encourage your clients back!


Alternatively, it can be as simple as a stamp or badge each time they make a purchase, regardless of the amount. Once they’ve collected their badges they have access to a reward.


With loyalty customer registration, all of this can be done digitally by assigning each customer with their own digital id.

What Do Clients Want From a Customer Loyalty Program?

Everybody loves the idea of something for nothing. That free coffee, after the nine you’ve already purchased, sure does taste sweet – but there’s more you can offer your loyal customers than just a freebie.


Rewards cards are a great way to entice clients with members-only exclusives. Here are some more ways to engage your clients with benefits:

Members only discounts

Access to deals or offers that are tailored only to your members helps create a sense of exclusivity for your brand users. We all like to think we’re ahead of the trend.

Tiered loyalty

If you’ve got a customer that comes back time and time again, it’s a good idea to harness that relationship and let them know they’re special to you. With tiered loyalty rewards, you can offer gold or even platinum membership levels, giving your biggest spenders access to greater rewards or discounts.

Free services or expedited shipping

Reward returning clientele with faster delivery, or a free service. For example, a coffee shop could offer a free pastry on the next visit, or a restaurant could take advantage of 2-4-1 entrees.

Advance Notice and Early Access to Products and Sales

Let you loyal customer base into your business secrets before everyone else. Whether it’s the chance to try a new product early, or just notice on what you’re working on, it helps get customers excited about your business growth.

What Can You Learn from Rewards Programs?

Points programs and loyalty points can help give you an insight into your customer buying preferences, which in turn can influence and shape the incentives you offer your clients. It’s a clever way to track your clients’ purchases.


Once you’ve collected their spending habits, you can store it ready for targeted ads, remarketing and future gift cards you know they’ll struggle to resist. All this adds to increased customer retention and strengthens your brand relationship.


What’s more, a loyalty rewards system is also a great way to collect information like name, address, birthday and more, which can be stored and used for your direct marketing throughout the year. All this can be collected when they sign up.

How Can a Loyalty Program Benefit a Small Business?

As well as boosting retention and allowing access to customer details and spending habits, loyalty programs are a useful scheme for small businesses that require very little work on your part while increasing the customer satisfaction.


Once the customer has their punch cards or digital wallet, it’s up to them to scan or present their card with each purchase.


At Glue, you can create your own branded members club, with digital loyalty schemes, coupon creation and loyalty points systems that are totally tailored to your business. Reward your clients and watch your customer retention grow. With Glue, we can help you harness the power of your small business to generate revenue and brand growth.

Related articles