There are few things more gratifying than checking off the last box on your to-do list — but getting the last punch on a punch card is definitely one of them.
No matter how satisfying a filled-out punch card might be, punch card loyalty programs have been declining… at least, in their traditional, physical form.
In this blog, we’ll explore the recent comeback of punch card loyalty programs, from why they stopped being popular in the first place, how they’re different now, and how to tell whether they’re right for your restaurant.
Ready? Let’s go.
The Return Of The Punch Card Loyalty Program
Physical punch cards were once the go-to choice for loyalty programs, but over the past few years, we’re seeing less and less of them — and for good reason.
- The cost of paper has been steadily increasing over the past few decades, making physical punch cards too expensive to produce.
- Over half of the world’s consumers now use digital wallets, meaning physical cards of any kind aren’t reached for as much.
- Physical punch cards are easily lost, forgotten, or even stolen, making them a fairly unreliable choice for loyalty programs.
So, physical punch cards didn’t turn out to be the best option for restaurants and coffee shop loyalty programs — but that doesn’t mean punch cards aren’t effective for building loyalty.
Right now, we’re seeing punch card loyalty programs make a huge comeback in a new-and-improved digital form, with big brands (re)introducing punch card-style rewards into their loyalty programs.
Domino’s Piece of the Pie
Domino’s has long been offering punch card-style rewards through their Piece of the Pie program. It’s a points-based system, but it works the same way punch card loyalty programs do: customers earn 10 points per order, and can redeem for free pizza once they hit 60 points (AKA buy six pizzas, get the seventh for free).
Starbucks’ Coffee Loop
Starbucks is currently piloting a new rewards feature with select members called Coffee Loop, a new iteration of a classic punch card loyalty program. With Coffee Loop, rewards members buy nine brewed coffees and get the tenth for free, with no restrictions on how many times they can use the reward — as the tagline says, it’s “[free] brewed coffee on repeat.”
→ For more examples of highly successful coffee shop loyalty programs, check out this blog!
3 Reasons Why Punch Card Loyalty Programs Work
Like we said before, physical punch card loyalty programs didn’t withstand the test of time, but that’s not because the program format itself isn’t highly successful. Here are three reasons why (digital) punch card loyalty programs work well for both restaurants and coffee shops.
1 — They’re incredibly simple
Punch card loyalty programs are about as simple as it gets in terms of how you earn rewards and when you’ll be able to redeem them. There’s no confusion about how close you are to a reward, what qualifies, whether you’ll get extra points on certain days… you buy something, you get digital punches, you earn free stuff. That’s it.
2 — They have the “almost there” factor
Because punch card loyalty programs are set at regular intervals (i.e., buy three, get one free), it’s easy to see how close you are to rewards — and it doesn’t change over time. This is a great way to incentivize customers to keep coming back, because after one or two visits, they’re already “almost there,” with rewards in sight.
→ Want to learn more about the psychological factors that play into strong loyalty programs? Check out this blog!
3 — They prioritize frequency over spend
One of the best features of punch card loyalty programs is that they aren’t tied to specific dollar amounts. So, instead of feeling pressured to spend a certain amount each visit, customers can earn rewards just by stopping by, whether they spend $5 or $50. This lack of spending pressure keeps the stakes low and engagement high.
Are Punch Card Loyalty Programs Right For Your Restaurant?
Punch card loyalty programs work well for a range of different restaurants/coffee shops. But whether it works for your business in particular really boils down to what your core offerings are.
While Domino’s and Starbucks have pretty comprehensive menus, their core offering boils down to one thing: for Domino’s, it’s pizza, and for Starbucks, it’s coffee. This makes a punch card loyalty program a perfect fit because the rewards are easily tailored to the core offering.
So, if your restaurant or coffee shop has one core offering, a punch card loyalty program is a good fit. When you tailor the punch card rewards to your top seller, it’s easy for customers to know what they’re getting and why they’re getting it (because it’s your core offering).
If your restaurant or coffee shop has multiple core offerings, a points-based loyalty program might work better for you. That way, you can reward customers equally, whether they order your core offering, your most experimental item, or your least popular pick.
But remember: you know your business and your customers better than anyone else, so only you can decide whether a punch card loyalty program is worth trying or not.
→ For tips on setting up a new loyalty program (punch card or otherwise), check out this blog!
Cravers Loyalty Program Structure Guide
When it comes to starting (or revamping) your own punch card loyalty program, it can be tough knowing where and how to start. Luckily, we’ve got just the resource to help you take those first few steps.
Our Loyalty Program Structure Guide has everything you need to pick the best loyalty structure for you and your business, including:
- How to choose the right types of perks to keep your program simple and rewarding
- How to do the math behind your rewards to make sure your loyalty program is (and stays) profitable
- How to structure your tiers so that customers stay engaged with your brand from the very beginning
FAQs
A loyalty punch card is a tracking system for rewards. When you buy an eligible item, you get a “punch,” and after a certain number of punches, you get a free item. Think “buy 9 coffees, get the 10th free.”
What are the disadvantages of a punch card?
Punch cards are expensive to produce (because paper costs have gone up), they’re less popular as most people use digital wallets now, and they’re easily lost and/or stolen.
What is the most popular loyalty program?
Starbucks Rewards is one of the most popular loyalty programs in the world.
