Loyalty programs

Updated 31 August 2026

A loyalty program is a rule a business sets for what a purchase gives back — points, a stamp, a level, a discount, a coupon or cash. The rule is the whole product: it decides whether someone comes back, and it is the only part a business really chooses.

The six mechanics, and nothing else

Every loyalty program in the world is one of six things, or a combination of them. Learning the six is enough to design a program for any trade.

Points — a share of every purchase returns as a balance spent on a later bill.
Stamps — a mark per visit or per item, and a free one at the end of the row.
Levels — a rank earned over a lifetime of spending that earns faster or unlocks a benefit.
Discounts — money off now, as a percentage or a fixed amount.
Cashback — a share of the purchase returned as value, framed as money rather than points.
Coupons and referrals — a named one-time offer, and a reward for bringing someone new.

Frequency and basket size pick the mechanic

A business visited daily with a small bill wants stamps, because the customer can count them and the goal is close enough to matter. A business visited twice a year with a large bill wants levels and coupons, because a points balance would never grow into anything worth returning for.

The middle — visited monthly, basket varies — is what points are for. Points scale with spend, so the same rule works for a small basket and a large one without anybody having to think about it.

What a program costs

A loyalty program costs the margin you give back, and nothing else, provided you only pay out on a purchase. That is the difference between a program and an advertisement: an advertisement is paid for whether it works or not, and a reward is only paid when someone has already bought something.

Set the give-back as a percentage of margin, not of price. Five percent back on a business running twelve percent margin is not five percent — it is over a third of the profit on that sale.

The part most programs get wrong

A program fails on the card, not on the maths. The rule can be perfect and it still does nothing if the card is at home, the app was deleted, or the customer has forgotten they ever joined.

That is the reason One Bonus is a network rather than a per-shop scheme. The card is already in the customer’s phone before your first purchase, so a new business starts with people who can use it on day one instead of spending a year handing out plastic.

Bonus programsHow each kind of bonus program works and which one fits a business: points on spend, stamp cards, levels, coupons and referrals. Run any of them on One Bonus.
Discount programsWhen a discount beats points, when it does not, and how to pick a percentage or a fixed amount. Discounts on One Bonus are recorded, so a campaign can be measured.
CashbackWhat a cashback program returns, how the percentage is set, and where cashback beats a straight discount. Run cashback as points on One Bonus and measure what returns.
Stamp cardsHow a digital stamp card works, how many stamps to ask for, and why paper punch cards leak. Every stamp on One Bonus is recorded against the customer, not the card.
Points systemHow to set an earn rate, what a point should be worth at the till, and how expiry and minimum redemption change behaviour. The arithmetic behind a points program.
Tiers and levelsHow a tier program lifts spend, where to put the thresholds, and what each level should actually give. Levels on One Bonus rank on lifetime points, not the current balance.
CouponsWhen a coupon works better than a standing discount, how to price one in points, and how to stop a coupon being used twice. Coupons on One Bonus are redeemed once.
Referral programsHow a referral program brings new customers at a known cost, what to reward each side, and how to stop it being gamed. Referrals on One Bonus pay out on a real purchase.
Customer loyaltyHabit, convenience, being recognised and price all beat a points balance. What a loyalty program can buy, what it cannot, and where it is the wrong tool entirely.
ExamplesThe coffee stamp card, the supermarket percentage, the airline tier, the pharmacy basket, the referral and the timed coupon — with the numbers behind each one.
GlossaryBonus, point, stamp, tier, coupon, cashback, redemption, churn, basket, ledger. What each loyalty term means and how it is used in a real program.
Bonus or discountA discount is given away now; a bonus is a reason to come back. What each costs, what each returns, and the cases where running both is the mistake.
Points or cashbackCashback returns value anywhere; points return it to you. Why the accounting is nearly identical and the customer behaviour is not.

Common questions

What is a loyalty program in simple terms?

It is a standing promise that buying from a business gives something back — points, a stamp towards a free item, a level, a discount or cash. The customer earns it by buying, and spends it on a later purchase from the same business.

Which loyalty program is best for a small business?

The one that matches how often people visit. Daily visits with a small bill suit a stamp card; monthly visits with a varying basket suit points; rare visits with a large bill suit levels and coupons. Copying a bigger competitor rarely works, because their visit frequency is different.

How much should a loyalty program give back?

Between three and ten percent of the bill is the normal range, but the number that matters is the share of margin, not of price. Work out what the give-back is as a percentage of the profit on that sale, and decide whether the return visit is worth it.

Can a business run more than one loyalty program at once?

Yes. Points alongside a stamp card, or levels alongside coupons, is common and often better than one mechanic alone. On One Bonus a business sets each program separately and can turn any of them on or off without touching the others.

Choose a program and run it on One Bonus

Get the app · Register my business