thread Re: Making a loyalty program feel rewarding without cutting too deeply into your margins? in Retail & eCommerce

Making a loyalty program feel rewarding without cutting too deeply into your margins?

sacredheart926 — Tue, 03 Nov 2026 16:13:15 GMT

Hi everyone! I’m reviewing our loyalty program and thinking about how to make rewards feel worthwhile while still keeping them sustainable for a small business. What kinds of rewards do your customers respond to most—dollar-off discounts, free products, or something else? I’d love to hear what’s worked for you.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

homeprogreen — Tue, 03 Nov 2026 16:25:41 GMT

I set mine up years ago when loyalty was first introduced. I do 1 star for every 20 dollars of their purchase. Once they have 10 stars they can redeem for 10% off their entire purchase ( except gift cards) customers have always seemed to like it and it helps to drive bigger tickets since it’s 20 before tax

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

BofBArtStudio — Tue, 03 Nov 2026 19:51:21 GMT

We set up ours many years ago and haven't changed it since but it is one butterfly for every $15 spent and when you get 10 butterflies you get 20% off up to $20. Save your butterflies and grow them to the second tier which is 25% off up to $25

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

David-BG — Tue, 03 Nov 2026 20:12:29 GMT

I keep mine pretty simple. I use Square's loyalty program with the monthly fee.

Basically, points are earned at a 5% rate. Spend $200 and earn $10 worth of points. Those accumulate until spent. They are spent in $10 increments. These are only automatic with re-using or updating their existing payment card with their phone number, though I am flexible to add missed points when the payment card is changed.

My return customer ratio is pretty good and many of the return customers are enrolled in the loyalty program.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

drenn — Wed, 04 Nov 2026 08:41:55 GMT

My Loyalty Program is simple ... I own a record store so for my rewards they get 1 RPM Point for every $12 spent. Once they hit 33 RPMs they get a free Record up to $29.77 (or $29.77 off a record over that amount). YTD my Loyalty Customers spend an average of $310 per month vs. $61 per month for Non-Loyalty with a 4.2 Average Visit rate per month for Loyalty vs. 1.2 visits per month for Non Loyalty. My loyalty customers have received about $2500 in rewards based on their $33,000+ in sales generation. My philosophy is to take care of those who take care of you, and then best way is to give them a good reward in return for their loyalty.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

sacredheart926 — Wed, 04 Nov 2026 15:04:57 GMT

Do you use the square loyalty for that?

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

drenn — Wed, 04 Nov 2026 17:51:40 GMT

I use Square Loyalty for my Loyalty Program.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

sacredheart926 — Thu, 05 Nov 2026 15:38:50 GMT

How do you set it to have it up to $20 or $25 Dollars??

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

drenn — Thu, 05 Nov 2026 18:28:56 GMT

I have it set up as follows:

Reward Type: Discount On An Item In A Specific Category

Reward Value: 33 (This is the amount of points needed to redeem)

Discount: 100%

Maximum Discount: $29.77

this set up allows me to ring in multiple items and then I can redeem a reward and it will apply it one of the items, so I don't have to do separate transactions to redeem a reward. If an item is under $29.77 it will zero it out and just tender out to cash. If the Item is over $29.77 it will act like a coupon and take $29.77 off and the remaining amount will need to be tendered to cash or credit etc .

I'll add that you can set up tiers to give greater rewards. I have a second tier, where they can turn in 66 points and get $59.54 off an item - this is used mainly for Vinyl Box sets or other big ticket vinyl packages.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

BofBArtStudio — Thu, 05 Nov 2026 18:40:24 GMT

Yes, I use Square Loyalty and have for about 10 years.

Re: Making a loyalty program feel rewarding without cutting too deeply into your margins?

BofBArtStudio — Thu, 05 Nov 2026 18:43:25 GMT

We use tiered loyalty. If you save your points instead of cashing them in, you can accumulate to reach the next tiered level. Right now we have two tiers with the first level earns 20% up to $20.00 and the second level earns 25% up to $25.00