Loyalty cards: What are they and how do they work?

In a competitive market, attracting customers is only half the job. The real key to sustainable growth lies in loyalty. This is where the loyalty card comes in—an effective strategy to retain customers and increase their purchase frequency.

Big brands have used them successfully for years, but now any business, large or small, can take advantage of them without complications thanks to digitalization.

In this article, you will discover what a loyalty card is, its advantages, how it works, and how you can implement it in your business simply and for free with Promotty.

What is a loyalty card?

A loyalty card is a rewards program that lets customers accumulate benefits for repeat purchases. Traditionally these cards were physical and stamped on each visit, but today they have evolved into digital versions that offer advantages for both businesses and customers.

What is a loyalty card for?

• Encourage customer frequency: A satisfied customer with benefits comes back more often.
• Increase average order value: Knowing they will accumulate rewards, customers spend more on each purchase.
• Improve the relationship through rewards: Builds trust and commitment to the brand.
• Collect valuable data on shopping habits: Enables strategic decisions based on real data.
• Differentiate from competitors: An attractive program can make customers choose your business over others.

How does a loyalty card work?

The operation is simple and follows these basic steps:

1. The customer joins the program: In store, via an app, or by scanning a QR code.
2. They accumulate points or stamps for each purchase: Each visit or purchase can add points, depending on the strategy.
3. They obtain rewards: Once a goal is reached (for example, 5 purchases), the customer receives a benefit such as a discount or a free product.
4. The cycle repeats: By receiving rewards, the customer keeps returning and strengthening the relationship with the business.

Digital loyalty cards, like those offered by Promotty, make this process automatic and hassle free.

Benefits of implementing a digital loyalty card

For businesses

• Fewer customer losses: Studies indicate that retaining customers is up to 7 times more profitable than acquiring new ones.
• More control and data: Every purchase and action is recorded, allowing you to adjust marketing strategies.
• Automation: No need to stamp physical cards or keep manual records.
• Higher customer lifetime value (CLV): A loyal customer spends more over time.
• Less dependence on aggressive discounts: You can reward loyalty without constantly lowering prices.

For customers

• Easy access without carrying physical cards.
• Personalized rewards based on purchase history.
• More motivation to keep buying at their favorite business.
• A more digital, modern experience that fits new consumption trends.

Physical vs. digital loyalty cards

• Ease of use: Physical can be lost or damaged; digital is always accessible on mobile devices.
• Personalization: Physical is limited to printed design; digital can be updated and personalized dynamically.
• Data analysis: Physical does not record purchases; digital offers detailed statistics.
• Automation: Physical requires manual stamping; digital is managed automatically.
• Environmental impact: Physical generates waste; digital is 100% paperless.

More and more businesses are moving to digital cards because they offer greater benefits and a better user experience.

Examples of successful loyalty cards

1. Starbucks Rewards: A digital program based on collecting stars that customers redeem for free drinks and products.
2. McDonald’s MyRewards: Offers points for each purchase that can be exchanged for free products.
3. Amazon Prime: Although not a traditional loyalty card, its model of exclusive benefits has proven effective for customer loyalty.
4. Small local businesses: Many cafés and restaurants have increased frequency with digital cards, avoiding printing costs and making use easier.

How to implement a free loyalty card with Promotty

At Promotty, we offer a completely free solution so businesses can create their own digital loyalty card in minutes. It’s quick and easy:

1. Register free on Promotty and set up your business.
2. Design your loyalty card with custom stamps or points.
3. Share your QR code in the venue or on social media so customers can enroll.
4. Start building loyalty effortlessly: Customers accumulate rewards automatically and you get valuable data on their purchases.

Practical example: A café can offer a card with “Your 5th coffee free,” where each purchase adds a digital stamp.

Other strategies that complement the loyalty card

• Personalized promotions: Send special offers to loyal customers.
• Automated marketing: Reminders for inactive customers.
• VIP experience: Exclusive benefits for your best customers.
• Gamification: Challenges and prizes for reaching certain goals.

Implementing a loyalty card in your business is one of the most effective strategies to retain customers and increase sales without relying on aggressive discounts. And with digital solutions like Promotty, doing it is easier than ever.

Ready to build loyalty without complications? Start free with Promotty and give your business a boost. We also recommend reading this other post about the smartest way to earn customer loyalty.