Businesses have handed out punch cards for nearly as long as there have been car washes and coffee shops; hoping to reap the rewards of the most basic loyalty marketing strategy. And they’re still at it.

So it’s obvious that using punch cards as a reward channel for loyalty programs to do what its meant to – keep customers loyal. But there’s a way to use punch cards more efficiently. According to a Visa study, 90% of consumers prefer a virtual punch card to a paper one.

You know the scenario; the guy behind the counter hands over business punch cards with stamps on some boxes and tells customers “come with this next time”.

But what’s the probability that the punch card will make it back to the business?

Most likely never. It will probably get shuffled up with other business cards, thrown out with receipts, or drowned at the bottom of a purse. There’s also the possibility that the customer comes back with many cards that have been marked just once and you’ll have to match up visits (such a pain).

Such pain points can ruin your entire loyalty program reward system, so you need to get them out of the way. The best approach to do so is a virtual one. By using a punch card app as a loyalty solution, you can eliminate such challenges effortlessly in your reward strategy.

So I’m going to guide you into all you need to know about a punch card app. What is it? How do you make a punch card app? How does it work? And a lot more.

Let’s start with a simple question – what is a punch card app?

What is a Punch Card App?

A punch card app is a virtual custom card that digitally replicates the purpose of a traditional paper punch card such as getting a reward after receiving X number of stamps. The punch card app is usually in the form of ‘buy X get 1 free’ and uses virtual stamps to monitor each purchase until ‘X’.

The gift could be anything of your choice. A free coffee, if you run a coffee shop or 20% off their next meal if you’re in the restaurant business. It’s all up to you.

How to Make a Virtual Punch Card For Customers?

To make virtual business punch cards for your customers, the simplest approach is to use a loyalty solution that allows you to use a punch card app for rewards redemption.

The rewards stay live on your customers’ smartphones, which means they can locate them easily.

What’s great about virtual loyalty punch cards is that they usually come in super easy-to-use interfaces that most times require just a few taps from your cashiers to stamp, even in rush hours.

So let’s see the usual steps you’ll have to take to create one:

  1. First, create an account on a loyalty program platform that uses virtual punch cards for loyalty tracking and reward redemption. Then customize your rewards by choosing how many stamps you want customers to collect before receiving a reward and put in what you want the loyalty reward to be.
  2. The next step would be to connect your device or your cashier’s device to the punch card app. Most times you need not download anything, as a lot of virtual punch cards work directly on a browser, so you normally won’t need to download or integrate it with your POS.
  3. Once your device has been set up, you can put it on your cashier’s table or wherever best suits it for your business.

How Does a Loyalty Punch Card Program Work?

A punch card, or loyalty card, is a piece of paper or card that customers keep inside their wallets. Every time a customer makes a purchase, they present the card at the cashier and receive a stamp or sticker. Once the card is full, they can redeem a reward. It’s a simple way to earn customer loyalty.

More sophisticated programs could include multiple rewards at different levels of stamps, or an expiry date for cards, or even double-stamp promotions, like for a special product or event.

How Does a Punch Card App Work?

A punch card app works exactly like a punch card – just on a digital medium, and with less chance of your customer losing their card. Instead of the cashier having a stack of cards and an ink pad, the cashier has an in-store device to manage the app.

Every time a customer makes a purchase, they receive a virtual stamp. After they’ve received a set number of loyalty stamps, they can trade them in for a reward.

As an illustration, here’s how CandyBar works as a punch card app:

  • Step 1: After buying a coffee, the customer inputs their phone number in the store check-in device.
  • Step 2: By keying in their phone number, the customer’s account is loaded on the cashier’s device. The cashier can then issue a stamp through the device.
  • Step 3: The customer gets an SMS message informing them they’ve received a stamp. If this is their first stamp, the text prompts the customer to connect their Facebook account. Otherwise, the text message contains a link that allows the customer to find out how many stamps they’ve earned so far.
  • Step 4: Once the customer has earned the required number of stamps to get a reward, they can redeem a reward. The cashier will be able to see the number of stamps and tap to issue the reward. reward.

What are some examples of Small Businesses using Punch Card Apps?

We all know of the big brands offering customer loyalty programs, but there are smaller brands using punch card apps too:

  • The Daily Cut is a protein-salad bar that offers a $5 discount for every 5 stamps
  • Bubbleology is a desserts cafe that offers waffles and bubble tea, and offers every 10th bubble tea free
  • Plain Vanilla is an artisanal cafe that offers a free cup of coffee for every 10th drink free.

If you’re looking for more, check out our list of Small Business Loyalty Program Examples.

Why Use a Punch Card App?

1. Punch Card Apps Reward Customer Loyalty

Punch card apps are the easiest solution to use for rewarding customer loyalty. And it’s all for good reasons. For one, it’s 6 to 7 times cheaper to convince customers to return than to get new ones. Customers are also 82.4% more likely to shop at businesses that run a loyalty program.

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It’s basic consumer psychology. People will most likely frequent businesses that offer them free stuff. Data corroborates this, with 65% of consumers in a survey stating that they check to see if a brand runs a loyalty program before trying out a service, shopping at a store, or visiting a restaurant.

This means that by introducing loyalty rewards, your current customers aren’t the only people you’ll reach.

So it’s simple logic if consumers love loyalty programs and punch card apps help you create a seamless reward redemption system for your program then they’re essential to the success of your loyalty strategy. After all, 37.5% of customers join loyalty programs for rewards.

2. Your Customers are likely to Prefer Apps (Over Paper Cards)

With mobile innovations exploding in usage and popularity – and the millennial audience constantly on the lookout for stellar customer experience, it’s a given that traditional paper punch cards could be headed down the road of dinosaurs.

Millennials for example have the largest spending power of any generation and in the United States they make up approximately 1/4 of the population.

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And it’s no secret that Millennials and everyone else use mobile devices a lot, so it’d only make sense to reach your audience where they are.

3. Punch Card Apps are more Convenient

Using a punch card app allows you to fit every aspect of your reward fulfillment into one place – your customer’s smartphone. You don’t have to bother about customers coming in to make purchases without a paper punch card or having different punch cards with stamps on each of them.

Imagine if a customer’s business punch card gets stolen or lost, it means they must prove their loyalty all over again. That’s frustrating. But by using their phone number they can easily receive stamps and earn rewards.

Then best of all, when you have new rewards and deals, you can easily communicate it to loyal customers since you already have their digits.

4. A Punch Card App can Track ROI (and tally the results for you)

A punch card app can help you determine the ROI of your loyalty program. You’ll be able to identify what offers and messages bring customers back and the ones that need to be tweaked for better results.

You’ll be able to track and analyze the performance of a specific message, target particular customers based on their number of visits, or if they’re slipping off.

Tracking your returns allows you to know what’s working, and what isn’t. When you discover this, you can focus your resources on profitable offers and strategies.

5. Fraud Prevention & Customer Recovery

Ever heard of those horror stories that involve employees stamping loads of paper business punch cards and then giving them to friends for free rewards? A virtual punch card can protect your business from such terrible scenarios.

Another advantage that a punch card app offers is data and logging. Every stamp is virtually monitored and tracked so you can easily spot when something isn’t right. This helps to prevent fraud and the potential for abuse by customers and employees.

Equally, you also have access to retrievable customer data which is extremely valuable. For instance, when you hand out a paper reward punch card, you’re not getting any data in return, which translates to lost marketing opportunities.

With a digital punch card you can receive customer information like phone numbers (as unique identifiers), email addresses (for annual events), and birthdays (for birthday offers)

Why a Punch Card App is better than a Punch Card/Paper Loyalty Card

If you’re still not sure whether to opt for a paper punch card or a virtual punch card, in this section we’ll see why a punch card app offers the best solution.

Personalization – You can tailor messages to individual customers

A great aspect of using a punch card app is that you can tailor your promotional messages and offers to align with the needs of a specific customer.

With traditional punch cards, you were limited to singular offers as the whole point of a paper punch card design was to provide one offer that never changes. For example, “Get a Free Meal After Your 10th Stamp on the Restaurant Punch Card.

But the virtual space allows you to provide customers with many interchangeable offers and special deals that satisfy their needs via customer segmentation using the punch card app.

Easier to Keep and Carry – Your customers won’t lose it!

These days no one walks around with large chunky wallets stuffed with paper business punch cards. Wallets are even reducing in size as the days go by and will probably slide into oblivion soon.

More and more people edge towards phone cases with mini cardholders or make payments from their mobile devices.

Chances are that people who have paper punch cards probably stuffed them in some drawer at home or in a forsaken wallet never to see the light of day.

When cards get abandoned, the customer loses out on their reward, and the business ‘loses’ the cost of printing and stamping the card. Why run a loyalty program that won’t work, if your customers don’t want to carry your punch cards?

That translates to lost punch cards, wasted cost, and faltering customer loyalty.

Why Go Mobile with Your Loyalty Program?

According to a recent loyalty report in the United States, 73% of tablet/smartphone users prefer using their mobile phones to engage with loyalty programs. Consumers are connected to their mobile gadgets and a punch card app will help to increase sales opportunities and drive engagements.

Here are some reasons the mobile approach works:

1. Mobile Apps allow for Real-time Communication

Timely messages, like push notifications, can boost customer engagement. Also, beacon technology can send out automatic messages to customers when they’re walking by your store or inside it. Such geo-fenced real-time communication offers a unique way to engage your loyal customers.

You also get to present your promotions at the right time and in the perfect way. Customer’s Birthday? Ping them with a personal birthday offer. Something special happen? Send an offer. When the New York Giants play a home game, Dunkin Donuts sends special offers through its mobile loyalty apps to customers — a great way to stay top-of-mind and reward customers on their way to the game.

2. Stand Out From Your Competition (With Better Data!)

Sure, loyalty programs help you stand out from the competition, but having a punch card app on mobile devices gives you a bigger edge in your industry. You get to access consumer data and create promotions that better suit your audience and satisfy their pain points more than your competitors.

3. Go Digital with Customer Service (like your customers want!)

These days most people prefer interacting with businesses digitally. Whether it’s communicating with customer care or finding out about new offers, a punch card app lets your customers do so digitally.

Some punch card apps even allow customers to submit reviews or feedback in-app, an improvement over paper loyalty cards.

4. Customer Segmentation (Based on Useful Data)

Using a mobile punch card app for fulfilling your loyalty program rewards helps you to segment customers based on factors like purchase frequency, SKUs, the value of the purchase, and then tailor promotional communication to align with real-time preferences.

5. Automated Engagements (To Stay Top-of-Mind for Customers)

The mobile approach makes it possible to send a custom loyalty SMS automatically to your customer’s phone, like birthday offers.

What Redemption Options Does a Punch Card App Offer?

Customers can redeem their offers in various ways after getting the set number of stamps.

  • Phone number: Using a punch card app, all the customer needs to do is type in their phone number and the cashier can redeem their rewards in a second.
  • Beacons: In this redemption option, the customer just has to place their phone near a beacon to get loyalty card stamps for their purchase. This is an excellent option for brands with higher volume but lower value transactions that won’t need the help of a worker.

That’s a Wrap!

Punch cards work. The numbers prove it and vendor testimonials show it’s a reward redemption strategy worth using to boost customer retention and experience. But with the ever-increasing global shift into cyberspace, paper punch cards don’t cut it anymore.

Consumers want everything on their smartphones, and your punch cards are no exception. With a punch card app, you can satisfy their desire and offer your customers the best experience with your reward program.

The benefits are boundless, from retrievable customer data to tailored real-time promotional messages or in-depth analysis of your program’s returns using a punch card app is the best approach to run an effective reward system in your loyalty program.

Darren Foong

Posted by Darren Foong

Darren works on Growth at Candybar. He spends too much time reading fiction, performing improv, and doing things that don't scale. One day he hopes to be quite interesting.