Perceived value is the worth of something in the customer's mind. For a product on the shelf it is usually the price on the tag, adjusted by how much they want it. It has little to do with what the item costs the shop. A cup of coffee is worth five dollars to the person ordering it whatever the beans, milk and cup came to.
The gap between perceived value and cost is where a good loyalty reward lives. A reward the customer values at $9 and the shop can supply for $2 is a strong reward; it feels generous and costs little. A $5 voucher is worth $5 to the customer and costs the shop $5, so it has no gap at all. That is why rewards made or prepared in-house nearly always beat money off, and why the item a regular already buys is usually the best choice: they know its price exactly, so they know exactly what they have been given.
In practice
Three shops on the same strip work out the ratio of perceived value to cost for their rewards. The bakery's free loaf sells for $9 and costs $2.20 to bake, a ratio of about 4.1 to 1. The cafe's free coffee sells for $5.20 and costs $1.40, a ratio of about 3.7 to 1. The bookshop's free book up to $25 costs the shop about $15 at wholesale, a ratio of about 1.7 to 1.
The bookshop has the hardest job, because it does not make what it sells. It can still improve the ratio: a reward of a book from a table of titles it bought well, or a new hardback it holds at a better discount, lifts the gap without making the reward feel smaller.
Perceived value also rises with choice and occasion. "Any loaf you like" is worth more to a customer than "a white loaf", even if the costs are close, and a reward handed over with a word of thanks is remembered longer than one slid across the counter in silence.