Loyalty points are a running balance a customer builds by spending, usually a set number of points per dollar, which can later be exchanged for something: money off, a voucher, a product. They are the engine of most large retail and airline schemes. Points suit businesses where spends vary wildly and the scheme needs to reward a $300 shop more than a $3 one. They also give the business a lot of control, since it can change earn rates, run bonus point weeks and set expiry dates.
Points versus stamps is the choice most small shops weigh at some stage. A stamp counts visits or items and fills to a fixed reward; points count dollars and build towards a choice of rewards. Stamps are easier to explain and quicker at the till. Points are fairer when one customer spends ten times what another does, but they need a system to calculate them, a balance the customer can check, and rules for what the points are worth.
In practice
A wine and cheese shop compares the two on the same customer, who spends $200 across eight visits. Under a points scheme of one point per dollar, with 200 points worth a $10 voucher, that customer earns $10 back. The voucher costs the shop the full $10, which is 5 percent of the $200.
Under a stamp card of eight stamps, one per visit over $20, the same customer earns a wedge of the house cheddar that sells for $12 and costs the shop $4. That is 2 percent of the spend in real cost, and 6 percent of the spend as the customer sees it. The stamp card feels more generous and costs less than half as much, because the reward is a product valued at shelf price and paid for at cost.
The points scheme does win for the occasional $400 hamper buyer, who would earn a lot of points in one visit and only one stamp. Most counters do not have enough of those customers to design around.
In Counter Club
The card is stamps only: there are no points per dollar. If you want spend to count, make it your stamping rule, such as one stamp per visit over $25, and write it on the sign under the QR. See the stamp card.