Most small businesses start a loyalty program with a punch card, and many keep one for years. It's cheap and everyone understands it. A digital loyalty card does the same job without the paper, and it tells you who your regulars are. This guide explains what a loyalty card is, compares the two, gives you a punch card layout to copy and covers how customers add a card to Apple Wallet.
What is a loyalty card?
A loyalty card is how a business recognizes a returning customer in order to reward them. It started as paper or plastic: a punch card stamped on each visit, or a plastic card with a barcode scanned at the register. Today it's just as often digital: a pass in Apple Wallet, an account found by phone number, or a payment card linked to the program. Whatever its form, the card ties purchases to a person so the business can count visits or points. It's the most visible part of a loyalty program.
How a punch card works
A punch card, or stamp card, gets a punch or a stamp for each qualifying purchase. When it's full, the customer gets the reward: the tenth coffee free, a free wash after six. It costs a few cents to print, needs no software and makes sense to everyone at a glance.
Its problems are just as familiar. Cards get lost or left at home, and the customer starts over. Stamps can be copied. You learn nothing about who your regulars are, and you can't send an offer to someone whose card is in a drawer. A punch card also counts visits rather than what was bought: a single espresso and a family's lunch earn the same punch.
A punch card template
If paper is right for now, a good punch card fits on a business card, 3.5 by 2 inches (89 by 51 mm), and says five things:
- Your business name and logo. It's what the customer spots in a full wallet.
- The reward in plain words. "Buy 9 coffees, get the 10th free."
- The punch spaces. Ten is the classic coffee card. A reward that takes twenty visits feels out of reach.
- What counts. One punch per visit or per item, and anything excluded.
- The small print. An expiry date if there is one, one card per customer, no cash value.
A layout that works: the logo and business name across the top, the reward line under it, two rows of five circles with the last one marked FREE, and the small print along the bottom edge. Print the back with your address and hours. A hole punch with an unusual shape, or a custom stamp, makes the card harder to fake.
How a digital loyalty card works
A digital loyalty card does the same counting without the paper. It usually takes one of three forms:
- A wallet pass. The customer adds a card to Apple Wallet or a similar app, and it's scanned at checkout.
- A lookup at checkout. The customer gives a phone number or email and the point of sale finds their account. Clover's rewards program works this way.
- A linked payment card. The program recognizes the card used to pay. Lightspeed says its retail customers can collect points with their credit card, no membership card required.
All three track points automatically and can't be lost in a coat pocket. Most also give you a way to reach the customer with an offer, once they've agreed to hear from you.
Punch card vs digital loyalty card
- Cost to start. Punch card: printing. Digital: often included in your point-of-sale plan, or a monthly subscription.
- Effort at the counter. Punch card: find the card, punch it. Digital: a scan, a phone number or nothing at all.
- Lost cards. Punch card: common, and the progress goes with it. Digital: the balance stays on the account.
- Fraud. Punch card: stamps can be copied. Digital: every point is tied to a sale.
- What you learn. Punch card: nothing. Digital: who comes back, how often and what they buy.
- Rewarding specific items. Punch card: only if staff remember the rule. Digital: set once in the earn rules.
How customers add a loyalty card to Apple Wallet
Apple Wallet only holds a loyalty card if the business issues one as a Wallet pass. Apple says the Add to Apple Wallet button can appear in a business's app, in an email or text message, on a website in Safari, in a notification after paying with Apple Pay at a participating store, or behind a QR code or barcode. The customer taps the button, then taps Add. To have the card come up by itself at the store, they can turn on Automatic Selection in the pass details. If there's no button, the business doesn't offer a Wallet pass, and Apple's advice is to ask the merchant. Square Loyalty is one point-of-sale program that offers an Apple Wallet pass.
When to move from punch cards to digital
- You keep reprinting cards because customers lose them.
- You want to know who your regulars are and how often they come.
- You want to reward specific items or slow hours, not just visits.
- You have more than one location and want one program across all of them.
If you're on Square, Toast, Clover or Lightspeed, start by looking at the program built into your point of sale. Our comparison of POS loyalty programs covers how each one works.
A loyalty card that lives on the receipt
The one thing every customer already gets is a receipt. With Smartbills Loyalty, a customer joins on the digital receipt your Square, Toast or Clover point of sale already sends, by saying yes by SMS or email or by scanning the QR code at the terminal. There's no card to carry and no app to download. Points are counted on the items they bought, and their balance and next reward appear on their next receipt.