Loyalty programs are structured marketing
efforts that reward, and therefore encourage,
loyal buying behavior – behavior which
is potentially beneficial to the firm.
In marketing generally and in retailing more
specifically, a loyalty card, rewards card,
points card, advantage card, or club card
is a plastic or paper card, visually similar
to a credit card, debit card, or digital card
that identifies the card holder as a member
in a loyalty program.
Loyalty cards are a system of the loyalty
business model.
In the United Kingdom it is typically called
a loyalty card, in Canada a rewards card or
a points card, and in the United States either
a discount card, a club card or a rewards
card.
Cards typically have a barcode or magstripe
that can be easily scanned, some are chip
cards or proximity cards.
Small keyring cards which serve as key fobs
are often used for convenience in carrying
and ease of access.
By presenting the card, the purchaser is typically
entitled to either a discount on the current
purchase, or an allotment of points that can
be used for future purchases.
Hence, the card is the visible means of implementing
a type of what economists call a two-part
tariff.
Application forms usually entail agreements
by the store concerning customer privacy,
typically non-disclosure of non-aggregate
data about customers.
The store uses aggregate data internally as
part of its marketing research.
These cards can be used to determine, for
example, a given customer's favorite brand
of beer, or whether he or she is a vegetarian.
Where a customer has provided sufficient identifying
information, the loyalty card may also be
used to access such information to expedite
verification during receipt of cheques or
dispensing of medical prescription preparations,
or for other membership privileges.
Loyalty programs can be viewed as a form of
centralized virtual currency, one with unidirectional
cash flow, since reward points can be exchanged
into a good or service but not back into cash.
History
For information on historical loyalty programs,
see Loyalty marketing history.
By continent and country
North America
United States
In the U.S., several major supermarket and
fish market chains and the three major pharmacy
chains require the cards in order for customers
to receive the advertised loyalty price.
These include Smith's, Kroger and Safeway,
Menard's, Winn-Dixie, Harris Teeter, Ingles,
Giant Eagle, Tops, Price Chopper, ShopRite,
A&P and its related chains Pathmark, SuperFresh
and Waldbaums, Wegmans, Stop & Shop and sister
chains Giant-Carlisle and Giant-Landover,
Rite Aid, Walgreens and CVS/pharmacy.
Many retailers allow accumulation of fuel
discounts.
Some have tie-ins with airline frequent-flyer
programs, and some agree to donate a percentage
of sales to a designated charity.
Most notably, Wal-Mart does not have a loyalty
card plan though anyone who purchases a gift
card can generally get a 3 cent discount per
gallon of gas at the fuel stations located
on Wal-Mart premises.
The practice is also common among book and
music retailers, from large chains to independent
retailers.
In some instances, the customer purchases
the card and receives a percentage discount
on all purchases for a period of time, while
in other instances, a customer receives a
one-time percentage discount upon reaching
a specified purchase level.
Major retailers Best Buy and Sears offer loyalty
programs that offer points redeemable for
dollar-amount discounts after accumulating
a set number of points along with other discounts
from time to time.
Independent hardware stores such as Ace Hardware
and True Value added customer loyalty programs
in order to compete more effectively against
larger chains as well as gather customer data.
Ace's program also offers customers a way
at the time of purchase to get items at a
price which would normally require completing
a mail in rebate.
In addition, office supply retailers Staples,
Inc. and Office Depot started issuing club
cards in 2005, which offer rewards in the
form of credits towards future purchases on
some or all items purchased in the store or
online.in
Almost all major hotel chains have cards that
allow guests to earn either points or airline
miles.
All major US airlines also offer rewards credit
cards.
Other travel related reward programs include
SeaMiles, with points that can be redeemed
for cruises.
For now, some American retailers have not
implemented club cards, including some grocery
stores Whole Foods and ALDI.
Between 2007 and 2013, Albertson's, Shaw's,
Acme Markets, and Jewel-Osco eliminated their
loyalty cards in favor of discounts for all
shoppers and targeting inventory to particular
neighborhoods.
In a few cases this is because the retailer
already issues its own credit cards, and thus
already has a direct relationship with the
consumers most likely to shop at its stores.
Max & Erma's has a loyalty program called
Good Neighbor Rewards.
Guests are rewarded based on their number
of visits by either 5%, 10%, or 15%.
Additionally, guests are periodically given
additional rewards by way of free items added
to their loyalty card electronically.
Truck stop chain Pilot Travel Centers' program
Driver Payback Points rewards truck drivers
for fueling up by giving them points that
can be used for purchase inside the store.
Although it can be used for general merchandise,
the program is specifically targeted to be
redeemed at the restaurant chain located inside
each location.
A few states regulate club cards.
Supermarkets in California are subject to
the Supermarket Club Card Disclosure Act of
1999.
Prominent online loyalty programs include
MonaBar, Memolink, Mypoints, FatWallet, Perka,
Belly, and Swagbucks.
Some online loyalty programs focus on "other-directed"
consumers including Upromise, Schoolpop, The
BSP Rewards Network and iGive.com.
Several banks also have rewards programs,
including three of the Big Four banks of the
United States – Wells Fargo being the lone
exception, CapitalOne, and Citizens Financial
Group.
PNC Financial Services launched a program
in 2009 as a direct result of its acquisition
of National City Corp., which National City
already had, along with a mortgage division –
neither of which PNC had had before the deal.
Recently, a lot of attention has been paid
to the loyalty programs due to companies like
Foursquare, Cardmobili and Shopkick providing
new ways for consumers and businesses to communicate.
All three companies focus on using smartphones
such as the Android and iPhone – Foursquare
partnered with AMEX to provide Foursquare
points when using an American Express card,
and Shopkick partnered with Visa to provide
Shopkick points when using a Visa card at
locations such as Best Buy, Toys "R" Us or
Old Navy.
Canada
The oldest loyalty program in Canada is Canadian
Tire money, in which the Canadian Tire company
gives out coupons which look like currency.
Air Miles is Canada's largest loyalty program –
Air Miles can be earned at more than 100 different
sponsors and almost a thousand different rewards.
Aeroplan began in 1984 as Air Canada’s frequent
flier program, but since 2008 has been owned
by Aimia Inc. and operates as a more widely
based coalition program.
Example of companies that run their own programs
include HBC Rewards/Club Z, which began at
Zellers in 1986 as Club Z; the PC Points program
for free groceries, The Body Shop's Love Your
Body Card, Shoppers Drug Mart's Shoppers Optimum
Card, Staples Business Depot's easyRewards
Savings Card and Sobeys' Club Sobeys card.
The plum rewards program is Canada's largest
loyalty program for reading enthusiasts, offering
everyday discounts and special coupons at
Chapters, Indigo Books and Music, Coles, SmithBooks,
the World's Biggest Bookstore and chapters.indigo.ca.
PetPerks is PetSmart's reward program where
members get a pre-determined discount on any
item in the store that displays a PetPerks
tag under the regular price tag.
Vicinity is loyalty platform for small business
retailers that was launched in May 2013 by
Rogers Communications Inc.
Almost every gas station in Canada offers
some sort of loyalty program itself or in
partnership.
For example, Air Miles at Shell gas stations,
Esso Extra at Esso, Petro Points at Petro-Canada,
Save-On-More at some Chevron locations in
BC, Canadian Tire money at Canadian Tire gas
stations, or a coupon that grants the customer
3.5 cents off per litre of fuel purchased
at Sobeys Fast Fuel locations that can be
used at a Sobeys banner store.
Loblaws grants a 1.5¢/L coupon similar to
Atlantic Superstore, and Real Canadian Superstore
that grants a 7¢/L coupon that can be used
at their stores.
Sunoco has a Performance Points reward program.
Oceania
Australia
The largest loyalty program in Australia is
flybuys, established in 1994 and owned by
Coles.
It has more than 10 million cardholders in
over 5.5 million Australian households.
A consumer study of Australian loyalty programs
in 2013 showed flybuys as easily the most
popular program in Australia.
Rival retailer Woolworths launched its Everyday
Rewards fuel discount card nationally in 2009
and by August 2010 had 5.1 million cardholders,
with 2.7 million linked to the Qantas frequent
flyer program.
Among other Australian retailers, the largest
programs are Myer's MYER one program, the
Priceline Club Card, Amcal Club, Millers Retail
Club, and the BB Retail Capital Pulse Rewards
program.
Pulse has more than a million members.
All major Australian banks offer credit cards
with reward programs.
Many offer points collection with the Qantas
frequent flyer program or conversion to points
for Virgin Australia's Velocity Rewards program.
The largest online rewards program is RewardsCentral.
Perkler is a website launched in Australia
in August 2009 which lists 1,800 loyalty programs
and their 280,000 associated perks.
New Zealand
The largest loyalty program in New Zealand
is Fly Buys.
Other significant programs include the New
Zealand Automobile Association AA Smartfuel
programme and Countdown supermarket's Onecard.
Europe
United Kingdom
The loyalty card market in the UK is one of
the most significant in the world, with most
major chains operating some form of reward
system.
Passcard has been claimed to be the first
reward scheme or discount card, created around
by Gary Wilson in 1981 and later known as
Passkey.
One of the first loyalty cards backed by a
major chain is believed to be the Sainsbury's
Homebase Spend and Save Card in 1982.
Of the "big four" supermarkets, only Sainsbury's
and Tesco operate loyalty cards for general
supermarket shopping, and Morrisons offers
a scheme based around purchasing fuel from
their filling stations.
Both Nectar and Tesco's Clubcard scheme have
been criticised for not offering value for
money.
When Clubcard or Nectar points are used for
money off supermarket shopping, they roughly
equate to a 1% discount, although offers can
increase this discount by as much as 4 times
for certain rewards.
Some retailers with banking operations also
award points for every pound spent on their
credit cards, as well as bonus points for
purchasing financial services.
A report in The Economist suggested that the
real benefit of loyalty cards to UK outlets
is the massive database potential they offer.
Morrisons operates "Morrisons Miles", whereby
customers earn vouchers based on fuel purchases.
Unusually, customers' personal details are
not collected so purchases appear not to be
tracked.
Vouchers are delivered at point of sale.
After trials in 1994, Tesco launched its Clubcard
program, the UK's first nationwide supermarket-only
loyalty card scheme, in 1995 with dunnhumby.
Sainsbury's launched its Reward Card in 1996.
This was replaced by the Nectar card in 2002,
which was launched in partnership with other
major brands.
Boots The Chemist first began planning a loyalty
card in November 1993, but building a CRM-focussed
loyalty program.
With an investment in excess of 30 million
GBP, the Boots Advantage Card, launched in
1997, is / was the largest smart card retail
loyalty card scheme in the world, and the
third-largest retail loyalty scheme in the
UK in terms of cards issued.
The Advantage scheme currently has 16.4 million
cardholders using the card online and in store
and at 3rd party retailers.
The scheme gives a cardholder 4 points for
every pound spent in a boots store under normal
shopping circumstances.
Most stores have kiosks which can be used
in conjunction with the cards for "exclusive
offers" which are printed on vouchers and
can be used at the till.
These vouchers enable money off specific purchases,
extra points for specific purchases, or money
off or extra points when spending has reached
an amount specified on the voucher, or other
offers such as double points on either everything
of specific products.
For example, a customer may get a voucher
which provides 250 extra points when they
have spent £50 in one transaction.
Points equal pence in store, and can be spent
at any time and on anything in store, providing
the card has enough points to cover the entire
cost of the merchandise.
The patronage dividend rewarded the loyalty
of the owner members of Britain's retail consumer
co-operatives since the Rochdale Pioneers
of the 1840s.
Paper record-keeping transformed in the 1960s
into a trading stamp scheme managed by the
Co-operative Wholesale Society, which was
gradually withdrawn as margins declined.
The loyalty card concept was used by some
co-operatives to restore dividend payments
at the turn of the 21st century, notably by
the CWS's "Dividend" card, which was replaced
by The Co-operative Membership card program,
adopted by several larger co-operatives.
Safeway's ABC Card was discontinued in 2000.
Airlines, Hotels and other loyalty schemes
also offer cards.
Marks and Spencer and the John Lewis Partnership
have credit cards which give vouchers in return
for spending, and do not issue separate loyalty
cards.
GAME has a reward card scheme for which every
pound spent a customer is rewarded 10 points;
for every 1000 points that one collects, one
gets £2.50 to redeem in the store, or online.
Preorders earn a customer 20 points per pound.
HMV has a reward card called purehmv which
allows the customer to claim a variety of
rewards, including in-store discounts.
The UK's largest retail bookmaker Ladbrokes
launched the Odds ON! loyalty programme in
late 2007, the first retail betting loyalty
scheme in Europe.
Customers earn points on each bet which can
be redeemed for bonus jokers and free bets.
Ladbrokes Poker also operates a loyalty program
for its online poker players where players
are able to exchange their poker points for
gift & prizes.
Maximiles is an online coalition program claiming
1.6 million members in the UK.
Maximiles also operates online programs in
France, Spain and Italy.
The opening of the first Best Buy store in
the UK — at Thurrock, Essex, in 2010 - was
accompanied by the launch of a customer engagement
program called My Best Buy.
This was described as "a tiered, digital loyalty
and customer engagement program that is designed
to build a lifelong relationship with the
customer by providing a personalized experience
through which they can manage their digital
and technology needs."
However, this business ceased trading in 2012:
the 11 stores were closed in January, and
My Best Buy closed on February 29.
The Ice Organisation launched MyIce.com in
2010, a scheme which rewards consumers for
shopping in a more sustainable way.
Ice's mission is ultimately to promote greener
goods and services to mitigate climate change,
and currently works with both national and
local retailers to encourage more local, sustainable
consumerism.
Republic of Ireland
In the Republic of Ireland loyalty cards have
been in operation since 1993, when Superquinn
introduced its SuperClub loyalty card scheme.
This is regarded as having been the prototype
for such schemes in Europe.
However, loyalty cards did not expand until
1997, when Tesco Ireland introduced its Clubcard
scheme, shortly after its purchase of Power
Supermarkets.
This was essentially a simple expansion of
the UK scheme – cards for this are physically
identical to those used by Tesco in the UK
and they can be used in both countries.
Dunnes Stores responded with the introduction
of their own ValueClub scheme in June 1997.
Today these are three main schemes operating
in Ireland, although ValueClub has been withdrawn
from Dunnes' Northern Ireland stores.
Supervalue recently introduced their own loyalty
club called Real Rewards.
All five major petrol station chains in the
country operated a scheme during the late
1990s – Esso had "Tiger Miles", Maxol had
"Points Plus", both of which operated on the
principle of getting items from a gift catalogue,
with Shell using Dunnes' scheme, Texaco using
the SuperQuinn system, and Statoil operating
a cash-back system, "Premium Club".
Due to increasing oil prices and tightening
of margins, all of these schemes ended by
the end of 2005.
Tesco Ireland's petrol stations still, however,
give Clubcard points.
GAME, a major computer game and hardware retailer
also operate a cashback card scheme, which
was merged with Electronics Boutique's programme
following the separation of their northern
European stores into the hands of GAME.
The scheme returns one-fortieth of the spend,
more than twice as generous as Tesco.
Rewards From Us To You is a hotel loyalty
program for independent hotels in Ireland,
England & Belgium.
It was founded in November 2011 by parent
hotel management company PREM Group, who is
based in Dublin, Ireland.
This program does not issue loyalty cards
but does everything electronically through
email.
This company currently has 26 participating
hotels and serviced apartments.
Guests earn points every time they stay with
any hotel in the club.
Guests can later redeem free night stays or
gift cards.
In addition to this all members receive exclusive
perks for signing up and staying at the hotel.
Germany
The largest loyalty program in Germany is
Payback, which was launched in 2000.
According to a study in August 2007 by GfK,
61% of German households have a Payback card.
It listed the HappyDigits program as having
a 42% share, with the Shell ClubSmart program
as third most popular with 13%.
In March 2008, the coalition program DeutschlandCard
was launched by Arvato.
As at March 2009 it had more than 4.5 million
active cardholders.
Russia
MALINA is the Russia’s coalition program.
MALINA was launded in 2006 by Loyalty Partners
Vostok.
MALINA is a loyalty card scheme comprising
partner companies including BP, Rosinter Restaurants,
Beeline, 36,6, Raiffeisenbank etc.
MALINA program operates in Moscow and St.
Petersburg bring together over 25 well-known
brands.
Over 6 million collectors earn MALINA point
when buying petrol, visiting restaurants,
making phone calls.
Malina card is accepted at more than 1000
Partner’s POS. 6,096,051 Malina cards were
issued from 2006 to 2012.
Turnover on Malina card amounted to 1.5 billion
dollars in 2012.Over 2000 goods and services
are available for points in Malina catalog.
One more Russian loyalty program is Mnogo.ru.
This project is fully independent.
Members of the club who own clubcards can
gain points in exchange for daily purchases
made both online and offline at partners'
shops.
A customer receives points while answering
the quiz, playing games and getting special
offers.
Cumulative points can be exchanged for prizes
from the company's partners.
Mnogo.ru has following advantages:
there are more than 3 000 000 members of the
club
the company has been rewarding its members
for the past 14 years
free membership
72 partners are leading Russian and international
businesses
members of the club are offered to buy more
than 1000 prizes
Switzerland
Loyalty programs are popular in Switzerland,
with the two main supermarket chains, Migros
and Coop prominent.
The M-Cumulus card can be used at the Migros
supermarkets, Ex Libris, SportXX, and other
retailers.
The Coop Supercard earns points on purchases
at Coop and a variety of other associated
stores.
Other stores such as Interio, a furniture
retailer, are also joining the market with
loyalty cards and store-based incentivised
credit cards.
In recent years, online loyalty programs have
also started to target the Swiss.
First to make an offering in Switzerland was
German-based Webmiles.
Claiming to be Switzerland's first online
bonus program, Bonuspoints was launched in
early 2008 and offers incentives for shopping
at 70 different online stores.
Italy
Loyalty programs are popular in Italy, with
the two main supermarket chains, Esselunga
and Il Gigante, leading the field with their
offerings.
Other stores such as Interio, a furniture
retailer, are also joining the market with
loyalty cards and store-based incentivised
credit cards.
Loyalty programs are also widely spread in
the Fast Moving Consumer Goods Industry, where
companies use this powerful tool to establish
long-lasting brand-consumer relationships.
The very first example of a loyalty program
in the food industry has been the 2008 "Lavazza
Carmencita digital collection" followed by
many other Brands such as Barilla, Casa Modena-Giravolte
and Tena Lady of the Multinational Sca Hygiene
Products.
Hungary
Two coalition loyalty programs in Hungary
are SuperShop and Multipoint.
SuperShop was established in April 2000 and
is backed by premium partners hu:SuperShop
Spar, OBI, OMV, Photo hall, Burger King.
Spain
VOILÀ Hotel Rewards launched in June 2008
with "Husa Plus," a co-branded loyalty program
for Husa Hoteles.
The Husa Plus program is currently offered
at approximately 145 Husa Hotels, primarily
located in Spain.
Barcelona-based online travel agency Budgetplaces
launched its loyalty programme in early 2011.
My budgetplaces lets clients earn credit every
time they make a reservation.
Turkey
Airline companies offer loyalty cards for
passengers to provide discount.
Pegasus Airlines has a loyalty program called
Pegasus Plus which gives rewards for every
flight.
Passengers can spent reward points as a discount
without waiting to cover a full flight.
Finland
Loyalty programs are very popular in Finland.
80% of people are in at least one loyalty
program and over 50% are member of at least
two programs.
Two major coalitions with loyaly programs
operating in multiple business sectors.
These are S-Group with S-Etukortti and Kesko
with K-Plussa.
These cards can be equipped with Visa or MasterCard
Debit / Credit payment features.
Both loyalty programs are being aggressively
pushed to consumers.
New major player in Finnish and Baltic markets
is Pins.
Norway
The largest Norwegian loyalty program is Trumf.
Trumf is a «brick and mortar» loyalty program
owned by NorgesGruppen, a grocery wholesaling
group in Norway.
KickBack.no is the largest online loyalty
program and cashback site in Norway.
KickBack.no is owned by Schibsted Media Group.
Asia
Hong Kong
Hong Kong offers many loyalty programs which
include Octopus Rewards, which started as
a chip based smartcard for transport and now,
the Octopus cards can be used to earn points
in certain shops, including McDonald's and
Wellcome supermarket.
Another loyalty program is for travelling
on the heavily patronaged MTR railway system
in Hong Kong, known as the MTR Club.
In terms of shopping or purchasing groceries,
one can use the MoneyBack card at PARKnSHOP
supermarkets.
Iran
The first Iranian loyalty program launched
in 1996 by Iran Credit Card Group "Zarrin
Card"(or Advantage Card)., "East Credit Card
Group Kish" also launched loyalty cards since
2005 in Iran.
These companies manage many brands in the
same platform, such as Iran Zoggs and Novin
Leather.
The Maadiran Group has a loyalty programme.
Indonesia
Centro Friends card is a loyalty card for
Shoppers of Centro Department Stores.
The Love Your Body card is the loyalty card
for The Body Shop stores in Indonesia.
Other notable programs in Asia include KrisFlyer,
the Singapore Airlines rewards program.
India
Payback India is India's largest coalition
loyalty program, with 12 million members,
over 30 partners and 3000 network partner
outlets, with 120 billion INR of sales generated
through i-mint-cards in 2009.
German loyalty program operator Loyalty Partner
took a controlling interest in i-mint in June
2010 and renamed the program Payback India
in July 2011.
Hero's GoodLife program claims over 10 million
members.
BPCL's PetroBonus fuel card program has 2
million members.
Indian Oil's fleet card program XTRAPOWER
and retail program XTRAREWARDS claim a combined
customer base of 3 million.
The Maruti Suzuki AutoCard, launched in association
with Citibank and Indian Oil had 370,000 cardholders
as in October 2008.Kingfisher Airlines FFP
King Club had 2 million members as in October
2010.
Shopper's Stop has been offering a loyalty
programme called First Citizen for well over
a decade for regular customers.
Other retailers like Lifestyle & Reliance
Retail also have their own loyalty programs.
Debit card loyalty programs include State
Bank Group's Freedom Rewardz is perhaps the
largest in the world with over 110 million
customers enrolled.
The program is operated by Loylty Rewardz.
Pinpoint operates programs HSBC and Standard
Chartered Bank.
The immense potential and sheer size of the
consumer base in India has already attracted
players like Groupe Aeroplan and Loyalty One
into the country.
Malaysia
In Malaysia, the BonusLink program was introduced
in a joint venture between Shell, Parkson,
Maxis and MBF.
The BonusLink program is coalition with earning
and redemption partners allowing members to
earn points at a number of Malaysian retailers.
Mesra Card is for Petronas and its used for
fuels and at the Mesra shop.
Genting Highlands Resort has its own loyalty
card, WorldCard that is primarily used to
gain points in Genting Highlands' Resorts
and Attractions.
However, it can also be used for Starbucks,
Coffee Bean and Häagen-Dazs and it is valid
in three countries, namely Malaysia, Singapore
and Hong Kong.
Jusco also has its own loyalty card, known
as Aeon Card.
In early 2008, ValueClub Marketing and Services
Sdn.
Bhd. launched it V-Kad at North Malaysia especially
in Penang state.
V-Kad has actively joint by various industries
such as F&B, fashion, saloon and optics.
It provides V-Kad members to collect V-Points
to redeem gift and exchange services with
the participating merchants.
In 2014, LoyalWith has launched a cardless
loyalty program for various industries.
It is a universal loyalty platform to link
all participating merchants to consumers in
single place.
Singapore
In Singapore, the three largest loyalty programs
are Plus, WorldCard and SAFRA Card.
The LinkPoints Programme has more than 1 million
members and over 600 participating merchant
outlets.
Taiwan
The French retailer, Carrefour has recently
introduced a new loyalty scheme whereby customers
can earn and redeem points for purchases made
in the store, and also earn additional points
for all purchases made using a Carrefour branded
credit card.
The largest online rewards program in Taiwan
is RewardsCentral.
Shanghai
The Smartclub program allows all Shanghai
residents to earn SmartPoints free, each time
they take the subway, bus, or taxi.
Those SmartPoints can be combined with points
earned at McDonald's, eLong, Sport100, cinemas,
bookstores, and other SmartClub partner retailers.
Program management
Across the globe loyalty programs are increasingly
finding the need to outsource strategic and
operational aspects of their programs, given
the size and complexity a loyalty program
entails.
Program managers are typically agencies with
specialist skilled in loyalty consulting,
creativity, communication, data analytics,
loyalty software, and back end operations.
The advent of Web 2.0 and SaaS online-based
services has provided lower-cost options for
small businesses to offer and manage their
own loyalty programs.
Moreover, there are many free and open source
alternatives to manage user awards and incentives.
Loyalty cards are becoming mobile.
The state of loyalty in the United States
and the US is changing quite rapidly.
Brands are trying to engage a direct relationship
with their customers.
On-line and mobile loyalty programs
Recently there has been a move away from traditional
magnetic card, stamp or punchcard based schemes
to online and mobile loyalty programs.
While these schemes vary, the common element
is a push toward eradication of a traditional
card, in favour of an electronic equivalent.
The choice of medium is often a QR code.
Some prominent examples are Austrian based
mobile-pocket est 2009, the US-based Punchd,
which became part of Google in 2011. and also
an Australian-based loyalty card application
called Stamp Me Others, like Perka, Loyalli
and Maze have offered similar programs.
Passbook by Apple is the first attempt to
standardize the format of mobile loyalty cards.
Disloyalty cards
In three cities, some independent coffee shops
have set up experimental 'disloyalty card'
programs, which reward customers for visiting
a variety of coffee shops.
Criticism
Companies complain that these loyalty programs
discount goods to people that are buying their
goods anyway, and that the expense of doing
these programs rarely show a good return on
the investment.
Other critics see the lower prices and rewards
as bribes to manipulate customer loyalty and
purchasing decisions, or in the case of infrequent-spenders,
a means of subsidizing frequent-spenders.
Commercial use of the personal data collected
as part of the programmes has the potential
for abuse.
It is highly likely that consumer purchases
are tracked and analyzed towards more efficient
marketing and advertising; in fact, this can
be one of the purposes of the loyalty card.
To some, participating in a loyalty program
funds activities that violate privacy.
There has also been concern expressed regarding
RFID technology being introduced to loyalty
cards.
Loyalty and credit-card reward plans may be
viewable as modern-day examples of a kickback.
An employee who needs to buy something for
a business trip, but who has discretion to
decide which airline or hotel chain to use,
has an incentive to choose the payment method
that provides the most credit card rewards
or loyalty points, instead of minimizing cost
for the organization.
See also
Identity management
Incentive
Incentive program
Loyalty marketing
Premiums
S&H Green Stamps
Trading stamp
References
