Why and How to Run a Punch Loyalty Program?

Stamp loyalty programs (punch card programs) are one of the oldest ways to keep customers coming back. Think of those punch cards from your favorite coffee shop – buy a few drinks, get one free. They’re simple, effective, and popular because people love seeing their progress toward a reward.

But how do they work in today’s digital world? Big brands in retail and restaurants are upgrading these classics with robust loyalty software. In this blog, I’ll dive into how punch programs have evolved, their pros, cons, and some real-world examples.

What is a stamp (punch card) loyalty program?

Stamp loyalty programs reward customers for repeat visits, think of earning a “punch” with each purchase and getting a freebie after a set number. While these programs started with physical punch cards, they’ve now gone digital with apps and websites.

Digital punch cards keep the simplicity but add convenience, automating rewards and removing the hassle of manual redemptions. It’s a big shift in a booming digital loyalty market, projected to grow from $51.5 billion in 2024 to $113.3 billion by 2034. These modernized programs blend old-school charm with tech-driven efficiency, improving customer experience and operations.

Benefits punch card loyalty programs

• Automated rewards & fraud prevention: Rewards are issued automatically for verified purchases, reducing errors and preventing fraud associated with physical loyalty cards.
• Scalability & integration: Stamp programs adapt to businesses of any size and integrate well with POS systems, e-commerce, and apps for a consistent experience.
• Customization & ease of use: Card punch programs can be tailored with tiered rewards, point systems, or special offers, while apps make tracking rewards simple and engaging for customers. The format is familiar and easy to grasp making this form of loyalty participation a no-brainer for customers. 

Where stamp loyalty programs work best?

Stamp loyalty systems shine in industries where customers make frequent, habitual purchases. These programs are especially effective when customer interactions are quick, personal, and often repeatable.

1. Coffee shops and cafés

• Why it works: Coffee is often a daily ritual, making it a prime setting for loyalty programs. Customers appreciate tangible rewards, like a free coffee after every 10 purchases. 
• Pro tip: Digital stamp cards allow coffee shops to track not just frequency but also preferences, enabling upselling opportunities like promoting seasonal beverages or bundling with pastries.

2. Quick-service restaurants (QSRs)

• Why it works: Fast food and takeaway joints thrive on customer retention. Stamp loyalty programs encourage repeat orders, particularly for combos or high-margin items.
• Pro tip: Combine digital loyalty with pre-ordering or delivery apps to streamline the customer experience and boost participation.

3. Car washes and auto services

• Why it works: Routine services like car washes or oil changes naturally lend themselves to loyalty incentives. Customers see clear value in earning free or discounted services for something they already do regularly.
• Pro tip: Use a digital program to send reminders for car maintenance, turning a loyalty program into a proactive customer engagement tool.

4. Salons, spas, and grooming services

• Why it works: Beauty and grooming services are personal and recurring, making them a great fit for loyalty programs. Clients are incentivized to book follow-up appointments or try additional services.
• Pro tip: Digital programs can track visit history, allowing for targeted promotions, such as discounts on a complementary service like a manicure with a haircut.

5. Fitness studios and gyms

• Why it works: Gyms and fitness classes rely on regular attendance for customer retention. A stamp program that rewards members for attending a set number of classes can motivate participation and build loyalty.
• Pro tip: Integrate digital loyalty programs with booking systems to automatically log visits and reward users with free sessions or merchandise.

Examples of popular punch loyalty programs

Punch loyalty programs have been adopted by businesses of all sizes and industries, each adding their unique twist to stand out and engage their customers. 

Here are some of the most interesting examples of punch loyalty programs in action:

1. Starbucks Rewards

While Starbucks’ program has evolved into a digital points system, it originally mirrored a punch card model. Customers earned a “star” for every purchase, which was tracked digitally via the app. This program became a standout due to its integration with mobile payments, personalized offers, and tiered rewards that encouraged repeat visits.

2. Krispy Kreme’s money-saving punch cards

In 2016, Krispy Kreme launched a football-themed punch card promotion for Carolina Panthers fans in North and South Carolina. Customers earned 1 point (or 1 punch) with every coffee purchase. These points could then be redeemed for rewards that mirrored the spirit of the game. A "Field Goal" (3 points) entitled customers to a small drip coffee, while a "Touchdown" (7 points) unlocked a dozen original glazed donuts for just $3.99.

3. Jamba Juice’s BOGO punch cards

Jamba Juice’s BOGO Cards modernize the punch card concept by offering six buy-one-get-one-free smoothie rewards. Customers load the card into the Jamba app, which tracks usage and manages rewards digitally, eliminating the need for physical cards. Often used in fundraising, organizations purchase these cards at a discount and resell them for profit, adding a community-focused twist.

4. McDonald’s traditional punch cards to digital rewards

McDonald's has a history of utilizing punch card loyalty programs, particularly with their McCafé beverages. Traditionally, customers received a physical card stamped with each McCafé purchase, rewarding them with a free beverage after a set number of purchases. 

In recent years, McDonald's has transitioned from physical punch cards to digital loyalty programs. The introduction of the MyMcDonald's Rewards program allows customers to earn points on all purchases, not just McCafé items. These points can be redeemed for a variety of menu items, offering a more integrated and flexible loyalty experience. 

5. Domino’s Points for Pies

In 2019, Domino’s launched the Points for Pies campaign, a digital twist on punch card loyalty programs. Customers earned 10 points per pizza scan – whether from Domino’s, a competitor, or homemade – via the Domino’s app. With 60 points, they could redeem a free medium two-topping pizza. Running for 12 weeks, the campaign embraced all pizza lovers, broadening its appeal and modernizing the punch card concept.

How Jollyes runs a punch-like loyalty program with Voucherify? 

Jollyes’ PetCLUB loyalty program uses Voucherify to bring a fresh take on the traditional punch card model. Customers earn points for every pound they spend – 10 points for Red tier members, 12 for Silver, and 15 for Gold. Once they reach 1,000 points, a £2 reward voucher is automatically issued, saving customers from having to track or manually redeem their rewards.

This system works both online and in-store, making it easy for customers to collect and use points wherever they shop. Members can check their point balance, see their tier status, and view rewards through a simple loyalty wallet. 

With Voucherify, Jollyes has built a loyalty program that’s easy to use and rewarding for its 1.4 million members. The automatic rewards help encourage repeat visits, while the punch-like model keeps the program straightforward and familiar. It’s a modern take on a classic idea, giving customers a reason to keep coming back.

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How to auto-redeem loyalty rewards with Voucherify?

Voucherify offers a neat feature for loyalty programs: automatic reward redemption. This allows businesses to configure one or more rewards that are instantly issued when customers hit a specific loyalty point threshold. 

For instance, in a “collect stamps” scenario, customers who buy ten coffees can automatically earn a free one. 

• Support for stamp/punch loyalty programs: With auto-redeem, Voucherify fully supports loyalty systems based on collecting points or stamps. This makes it ideal for businesses aiming to modernize traditional loyalty experiences with minimal friction.
  
  
• Automated points exchange: Businesses can automate converting points into rewards, such as issuing a voucher for every X points earned. These rewards can be configured with specific validity periods, adding flexibility to the program while removing manual steps for customers.

To ensure optimal performance and protect against potential misuse, the auto-redeem feature includes built-in safeguards:

• Customers can redeem up to 25 rewards in one go.
• Each customer is limited to 10 auto-redeem actions per day, preventing infinite loops caused by misconfigurations or malicious activity.

How to create a punch loyalty program with Voucherify?

Open the Voucherify dashboard, navigate to the Campaigns hub, and create a new loyalty campaign. Decide if you want points to expire after a certain period and define how customers will earn points, such as by purchases or specific actions.

Pro tip: Consider using expiration dates strategically to encourage faster redemption and maintain active customer participation. For example, set points to expire 6 months after they’re earned to create a sense of urgency while still giving customers enough time to redeem them

Next, create a catalog of rewards that customers can redeem with their points. You can enable the auto-redeem feature for one specific reward in the catalog, ensuring the reward is automatically granted once the required points are reached, just like a traditional punch card.

Pro tip: When determining the rewards structure, consider what will resonate most with your customers – whether it’s discounts, free products, or exclusive access to new items. Additionally, think about how often customers need to make purchases to earn a reward and the process for redeeming these rewards. 

Adjust the auto-redeem feature as needed – enable or disable the auto-redeem feature for specific rewards depending on your campaign goals. 

Pro tip: Be cautious when enabling the auto-redeem feature if your catalog includes multiple rewards with varying point requirements (exchange ratios). Activating auto-redeem for a smaller reward might prevent customers from saving points for higher-value rewards, as their points will continually be used for the auto-redeem reward. Carefully plan your catalog and reward structure to avoid unintended customer frustration or missed opportunities for upselling larger rewards.