Points or a Stamp Card: Which Loyalty Program Works for a Café?

Use a stamp card when one product drives most of your sales and most visits look the same: a coffee, a karak, a sandwich. Use points when baskets vary and prices range widely, because points reward spend and a stamp rewards a visit. Most small cafés should start with stamps. They are easier to explain at the counter and easier to price.

Neither works if the reward is priced wrong or the cards leak. Those two things decide whether the program pays for itself, so most of this post is about them.

A stamp card gives one stamp per qualifying item. After a set number, usually eight to ten, the customer gets one free. The customer understands it in two seconds, and you know exactly what you are giving away.

Points give a set number per riyal spent, and a balance turns into a reward, usually money off the bill. They handle a varied menu fairly: someone spending QAR 80 on a family breakfast earns more than someone buying a QAR 6 tea. The cost is that customers have to do arithmetic to know where they stand.

Tiers sit on top of points. Customers who pass a lifetime spend threshold, say QAR 1,000, earn at a higher rate. They are worth adding once you know who your top customers are. Keep them few, two or three at most, and never move anyone down, because a customer who loses a status they earned remembers it.

Owners usually price a free coffee at its menu price. That overstates the cost by four or five times. The money that actually leaves the business for a free latte is the coffee, milk and cup, not the QAR 18 on the board.

Cap the free item. If the card says any drink is free, people redeem it on the most expensive one. Set a maximum value, or name the item.

A reasonable starting point is a reward worth about 5% to 10% of what the customer spent to earn it, valued at menu price. This is an estimate, not a rule. Below about 3%, customers stop noticing the program. Well above 10%, you are mostly paying regulars who would have come anyway.

Distance matters as much as size. A regular who visits twice a week fills a ten-stamp card in five weeks. That is about right. If your first reward takes three months to reach, most people forget the card before they get there.

For points, work backwards from the reward. If you want a QAR 10 reward after QAR 150 of spend, that is about 6.7%, and the earn rate follows from it. Decide the reward first and the points maths second.

Paper stamp cards fail in predictable ways. None of them need bad intent to start, but all of them grow once people notice nobody is checking.

• Staff stamping friends' cards, or adding two stamps for one coffee
• Stamps copied: a matching stamp from a stationery shop, or a card photocopied
• One customer holding three half-full cards and merging them at the counter
• Cards lost or left at home, so the customer stops trying
• No record at all: you cannot tell how many rewards are owed or who redeemed them

A digital card tied to the till fixes most of this. The stamp comes from the sale itself, so a stamp needs a paid item. The balance lives on the customer's phone number, not a piece of card. And every stamp and reward has a date and an order behind it.

A loyalty program is only worth running if it changes how often people come back. Four numbers tell you whether it does.

• Repeat visit rate: the share of customers who come back within 30 days. Compare it with the month before launch.
• Redemption rate: rewards used against rewards earned. Very low means the reward is too far away or nobody knows about it.
• Sign-up rate: the share of sales with a customer attached. If staff are not asking, the program does not exist.
• Outstanding rewards: what you owe if everyone redeemed today. It is a real cost, so keep an eye on it.

Give it eight weeks before judging. A program that has not moved the repeat rate by then needs a closer reward or better asking at the counter, not more generosity.

1. 1Write down your current repeat visit rate, even roughly, so you have something to compare against
2. 2Pick one scheme: stamps if one product dominates, points if baskets vary
3. 3Cost the reward at cost price and cap its value
4. 4Set the distance so a regular reaches the first reward in four to six weeks
5. 5Write one sentence for staff to say at the counter, and practise it
6. 6Ask for the phone number on every sale for the first two weeks, not only when the customer asks
7. 7Check the four numbers above weekly, and change one thing at a time

In Outale, loyalty runs on the till. The cashier finds the customer by phone number or name, or adds a new one by typing a phone number. Points are earned on spend, stamps on items in the categories you choose, and tiers raise the earn rate once a customer's lifetime spend passes a threshold. When a balance is full, the payment screen offers the reward, and the stamp reward is capped at a value you set.

Every earn, redemption and reversal is kept in a history on the customer's profile, tied to its order, and a voided sale takes back what it earned. Only owners and managers can change the program rules. What it does not do: customers have no app to check their own balance, the receipt does not show it, and Outale sends no messages, so staff need to tell people where they stand.