Pros and Cons of Setting Up a Loyalty Card Program for Your Business


If you frequent any number of chain grocers, department stores, or even hotels, you are probably aware of loyalty card programs. When you sign up for membership you gain benefits like discounts, deals, upgrades, freebies, preferential treatment, and other extras that aren’t extended to the general public. And in most cases, reward points are tracked based on your usage or purchases, building up to offer even greater incentives. As a business owner, you might look at loyalty card programs offered by other companies and wonder whether or not such a system could help you to attract and retain customers. But before you jump in feet-first, it’s a good idea to understand what you stand to gain by implementing a loyalty card program, as well as potential downfalls of employing such a system.

The first thing to consider is what your rewards will be and how much it will cost to implement your program. Popular rewards for members include discounts on purchases, gift cards, free goods or services, upgrades to better goods or services, and even cash. These giveaways can cost your business a pretty penny. In addition, you’ll have to pay to set up the hardware and software solutions needed to track purchases and rewards for members. The initial setup can therefore be rather pricy. And if you fail to carefully plan how your rewards are granted, you could end up losing money over the long haul.

Of course, you’re not the first business to consider creating a loyalty card program for your customers, and you can certainly learn from the missteps of others. With appropriate planning, possibly with the help of an expert consultant, you can calculate costs in order to ensure that eventually the benefits of such a program outweigh the losses. And there is a lot to be gained from instituting a loyalty card system.

For one thing, it offers enticement to new and returning customers. Those that use your products or services frequently will enjoy the rewards offered for their loyal patronage. Such programs can also attract new customers, as well as increase the chances that they will give you repeat business. Even if you’re offering discounts or freebies along the way, chances are good that you’ll more than make up for these losses thanks to increasing sales. When you offer customers added value, you incentivize them to continue making purchases.

You can also use your program to track purchases, helping you to see which products and rewards members seem to prefer. You can use this data to stock up accordingly and even provide loyal customers with tailored offers that you think will appeal to them based on past purchases (i.e. target marketing). In other words, you’ll decrease effort and expense in order to increase profit. Not all customers will appreciate this, but in some cases it will definitely pay off via increased sales. And whether you offer loyal customers rewards like discounts, upgrades, gift cards from eCard Systems, or freebies, you’ll find that most consumers are interested in getting more out of every purchase, making your loyalty card program a success.



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