Loyalty program guide: how to plan and run a stamp card
What a loyalty program is, the common types, and how to set one up so customers actually finish their cards. Written for small, independent businesses.
What is a loyalty program?
A loyalty program rewards customers for coming back. The deal is simple: keep choosing us, and every so often you'll get something free or cheaper.
Big chains run them with points, apps and tiers. For an independent business the most common version is still the stamp card: one stamp per visit, and a free item when the card is full.
A digital program such as RewardForge keeps that idea but moves the card onto the customer's phone, so it can't be lost and you can see who is using it.
Whether it pays off depends on your margins, how often customers visit and how generous the reward is. The rest of this guide covers those choices.
Types of loyalty program
The four you'll come across most, and which of them suit a small business.
Stamp card
Suits: cafés, bakeries, barbers, takeaways
One stamp per visit or purchase, and a reward after a set number, often somewhere between 6 and 10. It's the easiest type for customers to understand and for staff to run, and it's the model RewardForge uses.
Points
Suits: shops where spend varies a lot
Customers earn points for every dollar spent and swap them for money off or free items. Supermarket loyalty cards work this way. It rewards bigger spenders more fairly, but you need a till system that can count points.
Tiers
Suits: larger brands, hotels, airlines
Customers move up levels, such as silver and gold, as they spend more, and each level comes with better perks. It can work well at scale but takes a lot of setting up and explaining.
Paid membership
Suits: subscription-style businesses
Customers pay a monthly or yearly fee for perks such as discounts or free delivery. It brings in money up front, but members need to feel they get their fee back.
How the types compare
| Feature | Stamp-Based | Points-Based | Tiered | Paid |
|---|---|---|---|---|
| Setup complexity | Very easy | Moderate | Complex | Moderate |
| Cost to run | Very low | Low | Medium | Low |
| Customer understanding | Instant | Easy | Moderate | Easy |
| Best for small business |
Why loyalty programs work
It mostly comes down to habit and a bit of psychology.
The psychology of a stamp card
People are more likely to finish something once they feel they have started. In a well-known 2006 study, the researchers Joseph Nunes and Xavier Drèze gave car wash customers either an 8-stamp card or a 10-stamp card with two stamps already on it. Both needed eight more washes, but more of the people with the head-start card finished it. This is known as the endowed progress effect.
Loss aversion plays a part too. Once customers have built up a few stamps, they don't like the idea of wasting them, which is a gentle pull back towards you when they're deciding where to go.
Then there's habit. If someone already walks past your shop on the way to work, the card turns "I might pop in" into "I'm one stamp off a free coffee". Loyalty schemes work best on people who were already likely to come back. They make those visits more regular rather than creating customers from nothing.
What a loyalty program can and can't do
A stamp card won't fix a quiet location or a product people don't want. What it can do is nudge existing customers to come back a little more often, and to choose you over a similar place nearby. Whether that pays depends on your own numbers, which is why the reward and the stamp count matter so much.
How to set up a loyalty program with RewardForge
Four steps from sign-up to the first stamp.
Sign up
Enter your business details and create your login. The first 30 days are free and you don't need to give payment details.
Set up your card
Add your logo and a picture of the reward, choose how many stamps it takes and write a line describing the offer.
Put up your QR code
Print the QR poster from the app and put it where customers wait: the counter, the till or the door. You can also share the join link online.
Start stamping
Customers scan to join. When they visit, staff scan the code on their card to add a stamp, and scan again when it's time for the reward.
30 days free. No payment details needed to start.
Tips for running a loyalty program
What tends to separate cards that get finished from cards that get forgotten.
Keep it simple
"Buy 9, get the 10th free" needs no explanation. If staff have to explain the rules at the till, they're too complicated.
Make the reward reachable
Think about how often a regular visits and set the stamp count so they can fill a card in a month or two. A card that takes a year to fill won't feel worth it.
Pick a reward people want
A free version of your most popular item usually works best: the coffee, the pastry, the haircut. It feels generous to the customer, and it costs you what the item costs you to make, not what you charge for it.
Go digital
Customers always have their phone with them. They rarely have a particular paper card. A digital card also shows you who is using it.
Mention it every time
The poster helps, but nothing beats staff asking "Have you got our loyalty card?" at the till. Make it part of the routine.
Check how it's going
Look at your customer list every few weeks. If lots of people stall at two or three stamps, the card may be too long or the reward too small.
Digital or paper?
Paper is cheap and familiar. Digital fixes most of its weak points.
Digital card
- Always on the customer's phone
- Can't be lost, damaged or faked
- Shows you who your customers are
- Google Wallet on Android
- No printing
- Progress updates with every scan
- No limit on customers
- No paper waste
Paper card
- Easily lost or forgotten
- Easy to fake
- No customer information
- Can't go in a digital wallet
- Reprinting costs
- Staff check cards by eye
- Cards wear out
- Paper waste
Loyalty program questions
What's the best type of loyalty program for a small business?
For most independent businesses, a stamp card. Customers understand it straight away, staff can run it without training, and you know exactly what each reward costs. Points and tiers suit bigger businesses with till systems that track spend.
How much does a loyalty program cost?
Paper cards cost a few pence each to print, plus reprints. RewardForge is $18.99 a month after a 30-day free trial, with no limit on customers. With either, you also pay for the rewards you give away, which you control through the reward you choose and the number of stamps.
Do loyalty programs increase sales?
They can, mainly by getting existing customers to come back a bit more often and to pick you over a similar place nearby. How much depends on your business, your reward and how well staff promote it. It's worth running one for a couple of months and comparing visits before and after.
What is a digital loyalty card?
A stamp card stored online and shown on the customer's phone. With RewardForge, customers join by scanning your QR code, and staff add stamps by scanning a code on the customer's phone. Android users can also keep the card in Google Wallet.
How do QR code loyalty programs work?
There are two QR codes. Your printed poster has one, which customers scan once to join. Each customer then has their own code on their card, which your staff scan to add a stamp or hand over a reward.
How long does it take to set up?
Sign-up is a single form: your business details, the card (logo, reward picture, number of stamps) and your login. After that you print the QR poster and you're ready to stamp.
Do customers need to download an app?
No. The card opens in the phone's browser. Customers create an account with their name and email so their stamps are saved, and they can add RewardForge to their home screen if they want it to feel like an app.
Can I see how my program is doing?
Yes. The customer list shows everyone who has joined, how many stamps and rewards each person has, and when they were last stamped.
Ready to set up your stamp card?
Try RewardForge free for 30 days. No payment details needed to start.