A stamp per visit is the simplest loyalty mechanic there is. Which is exactly why it gets used where it doesn’t belong.

In a café it makes sense: spends are similar, so a visit is a decent proxy for a customer’s value. In a shop where one customer leaves €8 and another €120, a stamp per visit rewards the first one — who comes more often and spends less. This article is about spotting when that line has been crossed, and how to set points so they don’t cost more than they bring in.

When stamps stop making sense

Three signals that you are past the line:

The spread of spend is wide. When a normal basket ranges from €8 to €120, a visit stops telling you anything. A practical rule of thumb: if the highest ordinary spend is more than five times the lowest, stamps are rewarding the wrong behaviour.

The purchase cycle is irregular. A customer comes three times in November and then not until March. Stamps assume a rhythm that isn’t there.

You sell things at different margins. A stamp per visit hands out the same reward for a purchase at thirty percent margin and one at five.

If at least two of those fit, it is time for points on spend.

How to set the value of a point

The most common mistake is not in the arithmetic but in never doing it. Three steps.

1. Decide what share of revenue you are willing to give back. In retail, one to three percent is the usual working range. A higher number means the program has to demonstrably lift spend, not merely reward what would have happened anyway.

2. Derive the rate from that. At one percent, a €4 reward means €400 of purchases. Split it into points so the numbers come out round and memorable — a customer who cannot estimate the rate in their head will ignore it.

3. Check it against real baskets. Take three actual receipts — small, medium and large — and work out what the program would have cost on each. This is what exposes a setup that looks sensible in a spreadsheet and is unsustainable in practice.

Spread of spend: why the average misleads

Average spend is close to useless in retail, because a minority of large baskets drags it upwards.

More useful is the median, plus a separate look at the bottom and top third of customers. Typically you find the program behaves completely differently for each: at the bottom it rewards people who were coming anyway, at the top it doesn’t give enough for anyone to notice.

Split that way, it usually turns out that the threshold should be higher and the reward bigger than the first estimate. A small reward reachable by everyone is the most expensive option of all: you pay it to everybody and it changes nothing.

Seasonality and dormant customers

In retail it is normal for a customer not to come for six months. That is not a loss the way it would be in a café — it is simply the cycle.

Two practical consequences:

  • Don’t set a short expiry on points. Points that lapse before a customer naturally returns devalue the program and produce angry people at the till. If you want expiry at all, count in years, not months.
  • Use the season to reach out. A customer who bought gifts here last November is the single best recipient this October — and it is a message that doesn’t irritate, because it arrives when they are expecting it.

When not to run a program at all

The honest part. A loyalty program in a shop isn’t worth it when:

  • you sell things people buy once in a lifetime. A reward for repeat purchase has nothing to reward.
  • price alone decides. For a customer comparing to the cent across online shops, neither a stamp nor a point outweighs a price difference.
  • you have nobody to offer it to. A shop where ninety percent of customers come once and never again needs to address the reason for that, not issue a loyalty card.

Numbers worth watching

  1. Average spend of cardholders versus everyone else. For a points program this is the direct answer to whether it works.
  2. The share of revenue that went through a card. A low number means the card isn’t being offered, not that nobody wants it.
  3. The actual percentage of revenue returned as rewards. Compare it with what you decided in step 1 — the gap between plan and reality tends to be surprising.

Where to go next

Not sure whether to pick points or stamps? Get in touch – no strings attached.