How Loyalty Cards Fall Short Compared to Digital Loyalty Programs

klyons Customer Engagement, Customer Loyalty, loyalty programs, News

The simplest loyalty program to ever exist is the punch card program.

Any individual who has ever visited a coffee shop or a nail salon or a smoothie joint has been offered a punch or stamp card. The system is simple – every visit or purchase gets you a stamp/punch. After you’ve accumulated enough stamps you get some form of reward — a free drink or a discount on an experience. And then you start again!

Easy. Simple. And cheap to run.

Loyalty punch cards are the simplest way to kick-start a small business loyalty program on a budget. But secretly they can be very costly. When individuals make fake cards or stamps to cheat the system it quickly begins affecting your bottom line. Fraud is one of the common afflictions of punch card systems. What is a benefit can also be a hindrance. If you want to start a serious and long-lasting loyalty program, avoid going the punch card route.


Plastic Loyalty Cards


The most common loyalty card is the plastic loyalty card. Plastic loyalty cards are found everywhere, with good reason; in some areas, these cards offer numerous benefits. They’re easily customizable and thus can work as mini advertisements helping build brand awareness when carried by customers.

They can track customer purchase behavior and purchases preferences, allowing a business to offer special promotions or discounts. Additionally, most POS providers now allow merchants to accept loyalty cards of all kinds, which further expands their appeal.

However useful they might be, they also have downsides. They can clutter up a customer’s wallet or purse. If the card is left behind and there’s no alternative way to look up a member’s account, the customer’s opportunity to engage in the loyalty program is lost.

In CodeBroker’s 2017 Shopper Loyalty Survey, carrying cards was the number one cause of consumer frustration. Over 43% surveyed stated cards were the biggest pain point in their loyalty programs. 17% said even looking up a missing card was the most annoying part of the card-carrying process.

Physical cards are also limiting in that they fail to provide customers with real-time rewards status. Customers need to use alternate mediums to look up how many points they have or what current discounts are available on their loyalty card.


Digital Loyalty Programs


While plastic cards are perhaps the most traditional format of retail loyalty programs, shoppers still end up throwing them away just as often as they use them. Instead of adhering to a physical-card only loyalty program, brands need to expand into digital loyalty.


Companies who modernize their loyalty programs to mobile-friendly or develop a mobile app understand how to craft an enjoyable experience for their customers. Providing a convenient program engagement method for customers who are already used to accessing similar lifestyle apps will help you stay competitive. It demonstrates you’re investing time and effort into making your customer journey as streamlined as possible. Simplicity and ease from POS to point redemption.


Crafting a well-designed digital loyalty platform shows you understand your customer base. In the same CodeBroker survey, over 18% said they preferred to access their loyalty programs through a mobile app, 34% through SMS or text message. Your customers want easy access to their points and rewards, a simple and efficient redemption process, and enjoyable customer service. Building out a digital loyalty platform that addresses every point will dramatically change your customer interactions for the better.


How your customers engage with your platform is a defining sign of the overall health of your loyalty program. Shifting from a solely physical card loyalty program to a digital one empowers your customers to fully engage with the program. If you can combine a digital loyalty program with a physical loyalty card in creative, exclusive way, then your program will stand out even more!


Companies need their loyalty programs to have a digital presence in order to stay current and competitive in the market. Let us help you build your digital loyalty platform today!