Whether it's a small, mom-and-pop shop or a large chain, customers want to feel special and not like just another body when they walk through the door. Loyalty programs are an easy way to get customers to stick with a business by rewarding them for their repeat business.
Most importantly, loyalty programs help businesses grow. A study by the Harvard Business Review showed that businesses that focused on customer loyalty grew 2.5 times faster. What’s more, a 2018 survey by e-commerce marketing platform Yotpo found that 39% of loyal customers spent more on a product from a business they’re loyal to even if there are cheaper options elsewhere.
We looked at over two dozen loyalty programs and chose the best based on features, ease of setup, industry, price, and more. Here are our top seven picks.
The Best Loyalty Programs of 2020
Best Overall: Loopy Loyalty
Loopy Loyalty is a customer loyalty platform that allows businesses to create digital punch cards that customers can store in their Apple Wallet or Google Pay digital wallets. Merchants download the Loopy Loyalty app on a smartphone and scan the QR code on a customer’s loyalty card to issue a stamp on their phones. We chose it as the best overall because it lets businesses create a simple, points-based loyalty program with push and location-triggered messages.
Businesses can set up a digital loyalty card in minutes and customize it with their own text, logo, and colors. They can choose either a single reward card that offers a reward when a card is full (for example, buy 10 coffees and get 1 free) or a multi-reward card that offers rewards at different stamped milestones (ex., collect four stamps and get $5 off, collect eight stamps and get a free appetizer).
Loopy Loyalty also lets merchants send notifications to all customers or a select group and can also trigger a notification via GPS or unique beacon ID (UUID) when a customer is near a business’s location. Finally, merchants can track key metrics to see which customers are the most loyal and retarget them with special deals or rewards.
Loopy Loyalty lets users try any of its plans free for 15 days. No credit card is required and they can cancel anytime.
- $15 per month
- 1 card design
- 1 location
- 1 beacon UUID
- $39 per month
- 3 card designs
- 3 locations
- 3 beacon UUIDs
- 10 sub-users
- Card customizations
- $50 per month
- 10 card designs
- 10 locations
- 10 beacon UUIDs
- 50 sub-users
- Card customizations
- Unique customer enrollments
- Data Export
Runner-Up, Best Overall: CandyBar
CandyBar is a digital loyalty punch card launched in 2017 by referral marketing company ReferralCandy. We chose it as our runner-up because it lets businesses set up a point-based loyalty program with no app download that customers can access via text.
Setting up a CandyCar account takes just three steps. First, a user signs up for an account that can be used free of charge for 30 days. Next, they enter their reward milestones, like five stamps for a muffin for a coffee shop or 20 stamps for a 40% discount for a retail store. Finally, the merchant sets up a smartphone or a tablet as a customer check-in device and another they can leave under the register or carry in their pocket.
Redeeming rewards is easy and requires no app downloads. When a customer enters their phone number on the store’s login device, it pings the merchant’s device. From there, the merchant digitally stamps the customer’s card once they make a purchase. The customer then gets a text message with a link that lets them see how many stamps they need to earn their next reward.
CandyBar provides merchants with a business dashboard with basic insights on enrollment, the busiest days and times, and how often loyalty members visit the business. The software is entirely web-based and doesn’t integrate with any cash register systems or third-party apps.
There’s no cost to start a CandyBar account, and merchants can use it free of charge for the first 30 days.
- $45 per month
- Unlimited stamps
- Unlimited customers
- Unlimited rewards
- 500 text messages per month
For $3,999 billed annually, businesses can sign up for the Enterprise plan, which includes all of the features of the Standard plan but also includes unlimited texts, a dedicated account manager, and priority support.
Best for Ecommerce: Smile.io
Originally developed in 2012 as a points-based loyalty program for the Magento e-commerce platform, Smile.io now also offers VIP and referral programs for over 25,000 businesses. We chose it as the best for e-commerce because it makes it easy for customers to earn rewards on online stores through purchases, social sharing, and social referrals.
With Smile.io, merchants can create a points-based, VIP, or referral loyalty program with just a few clicks. Users can assign points to different actions like creating an account, sharing and referring friends on social media, and making purchases and reward users with percent or dollar discounts, free products, or free shipping. Customers can also get email alerts when their points are about to expire to encourage engagement.
Users can also create VIP programs to offer customers additional rewards and status the longer they stay with a brand. Set milestones based on points or dollar amounts and award VIP customers with bonus gifts, contest entries, special events and sales, and more.
Smile.io works with popular e-commerce platforms Shopify, BigCommerce, and Wix and integrates with over two dozen third-party platforms, including Mailchimp, HubSpot, and Reviews.io.
Smile.io offers pricing plans for small, medium-sized, and growing businesses as well as an enterprise plan and a free plan for businesses that just need a basic rewards program.
- $0 per month
- Points program
- Referral program
- Default reward emails
- Analytics overview
- $49 per month
- All Free Plan features
- Custom reward emails
- Analytics overview
- One app integration
- $199 per month
- All Starter Plan features
- Customer reminders
- Points expiry
- Analytics dashboards
- Two app integrations
- $599 per month
- All Growth Plan features
- VIP program
- API access
- Analytics dashboards and custom reports
- Unlimited app integrations
Best for Restaurants: Loyverse
Loyverse was developed in 2014 as a free point-of-sale (POS) system for restaurants, bars, cafes, and retailers. We chose it as the best for restaurants since it offers a free integrated POS and loyalty platform with affordable add-on features.
Loyverse makes it easy for restaurants, cafes, and retailers to turn any iPhone, iPad, or Android smartphone or tablet into a cash register. Users can track inventory, manage multiple registers or locations, and accept credit card payments.
Loyverse also lets businesses reward customers for their purchases with a built-in loyalty rewards program with no additional hardware or software. Customers can automatically enroll in a rewards program with their first purchase and get a rewards card that can be scanned at any business location. They will also be able to see a summary of their balance and rewards at the bottom of their printed or emailed receipt.
Because Loyverse is a fully integrated POS, users can track the purchase and visit history of any customer to identify their most loyal customers, make notes about their purchasing preferences, and award them bonus points for their loyalty.
Loyverse is free to set up and use and offers paid add-ons that allow users to manage their employees and get access to advanced inventory management tools.
- Manage multiple stores
- Sales analytics
- Inventory management
- Loyalty program
- Free kitchen display software
- Free customer display software
Employee Management Addon
- $5 per employee per month
- Manage access rights
- Track timecards
- Track sales by employee
Advanced Inventory Add-on
- $25 per store per month
- Create purchase orders
- View inventory valuation report
- Manage stock
Best for Building Customer Relationships: Goody
New Zealand-based Goody was created in 2014 as a universal loyalty system any business could use. Today, it offers a full stack of loyalty rewards, marketing, and customer relationship management (CRM) tools. We chose it as the best for building customer relationships because it provides business with robust customer insights, marketing automation, and third-party integrations.
Goody lets merchants create custom, points-based loyalty programs with rewards and coupons. The platform offers a number of advanced features, such as sharing points across locations, sending coupons to encourage visits to new locations, and alerts for suspicious transactions or point redemption.
Goody also offers customer management and marketing automation features to create a loyalty program on steroids. Advanced reporting lets merchants get real-time data on customer demographics, visits, and buying behavior, as well as reports of their store activity.
From there, merchants can segment their customers based on their life cycle behavior and target them with custom email marketing campaigns, automated coupon sends, and automated point balance reminders.
Goody lets customers register via email, phone number, or mobile app scan and integrates with over two dozen POS and third party marketing apps, including Shopify, BigCommerce, Magento, Square, Lightspeed, Vend, and Mailchimp.
Goody offers two pricing plans suitable for most businesses as well as an enterprise-level plan. Prices are available by consultation only, but the company claims that its plans start at $79 per month.
- Loyalty card system
- Double/triple point days
- Coupon campaigns
- Email campaigns
- Marketing automation
- Birthday campaigns
- Point balance reminders
- Data exports
- Staff and fraud alerts
- Campaign and store reporting
- Tablet registration app for members
- Up to one app integration
- Email and chat support
- All Basic Plan Features
- Up to two app integrations
Best for Membership Businesses: Perkville
Perkville was founded in 2010 as one of the first customer platforms that allowed customers to track their loyalty and get rewarded for it. Today, it serves over 2,000 business locations and 4.8 million reward members. We chose it as the best for membership-driven businesses because it connects directly with POS and membership software for seamless loyalty program integration.
Unlike other standalone loyalty reward programs, Perkville can automatically pull customer activities into its system from POS software like Shopify, Vend, and Lightspeed. There’s no scanning cards or asking customers for an extra sign in. Fitness businesses and salons also love Perkville’s integrations with membership software like Mindbody, Booker, and ClubOS.
Perkville offers the most features found in a loyalty program, including coupon codes and promotions. It also offers customers point-based rewards and rewards for promoting the business on social media and referring friends via social media or email. The software also lets businesses offer rewards from other companies, allow members to earn points at multiple locations, and generate reports on redemptions and rewards.
Perkville doesn’t offer pricing on its website, but third-party sources indicate that the company charges $99 per location per month for its loyalty software.
Best for Attracting New Customers: SpotOn
SpotOn was founded in 2010 as a digital loyalty and marketing software platform for small and medium-sized businesses. It has since added additional business solutions, including POS, reviews software, payment processing, and more. We chose it as the best for attracting new customers because it makes it easy to incentivize existing customers and their friends to earn rewards by checking in.
SpotOn makes it easy to set up a points-based reward system like many of the other programs we reviewed. However, instead of just rewarding customers for their purchase, the platform also allows them to earn points by checking in at a store location.
SpotOn offers in-store software that can be used on any tablet, allowing customers to create a rewards account and check in with each visit. Customers can also use the SpotOn app to check in on-site and receive special offers and notices that will bring them back.
SpotOn also offers an impressive suite of marketing tools to help engage with loyal customers and extend a business’s reach to new customers. Users can quickly create email and social media messages with a built-in campaign wizard, create automatic campaigns triggered by segments or behavior, and even encourage new customers to visit by posting promotions on the social feeds of loyalty members.
SpotOn offers two plans: one with its software only and another with its software and payments system.
SpotOn Software Only
- $195 per month
SpotOn with Payments
- $25 per month
- Payment Analytics
- Loyalty: +$65/month
- Appointments: First user included, +$65/mo for two or more users access)
- Website: +$65/month
How Do Loyalty Programs Work?
Loyalty programs used to be limited to cards offered by small stores. Every time a customer made a purchase, they would add a stamp or punch to their card. When the card was “full,” the customer could redeem it for a special or discount, like the next coffee being free or a free drink or appetizer with their next meal.
Today’s loyalty programs are a bit more sophisticated. Most eliminate paper punch cards, which often get lost, with a digital card that can be stored on a smartphone or accessed on a tablet at the store counter.
The most advanced loyalty programs allow online merchants to offer rewards like discounts or free products to their customers who follow them on social media, share their posts, or refer a friend by email or on social media.
How Can Loyalty Programs Help You?
Loyalty programs can save customers money by offering them discounts, free products, or promotions by encouraging them to buy products from one business that they could find somewhere else.
From a business standpoint, even though they are giving away something for free or at a discount to loyal customers, they more than make up for it by the increased revenue from repeat business. In short, loyalty programs are a win-win for both businesses and customers.
Are Loyalty Programs Safe?
Because loyalty program software doesn’t store customer credit card or financial data, they offer a low-security risk. Hackers have only recently begun targeting loyalty programs for two purposes.
The first is to redeem the rewards. In the case of premium programs like hotel point rewards, this can result in customers losing a few hundred dollars in redeemable rewards. In these cases, the companies issuing the loyalty program typically restore the customer’s account.
Hackers also use personal data (usually an email address) stored in loyalty program records to target phishing attacks against customers. These are usually aimed at getting them to reveal more sensitive information like passwords and credit card numbers. If you suspect your account has been hacked, contact the merchant and your bank for assistance.
Are Loyalty Programs Worth It?
According to an infographic published by Invesp, increasing the retention rate of customers by just 5% can increase profits by 25% to 95%.
A loyalty reward program can also be targeted to accomplish different business goals. A store that wants to increase the amount each customer spends can reward one point for each dollar spent. Conversely, a business that wants visitors to come into the store more often can reward points for each visit.
How We Chose the Best Loyalty Programs
We looked at over two dozen loyalty programs for this review. We made sure to choose platforms that were easy to use right out of the box, since each program is supposed to increase a business’s revenue, not its workload.
We also wanted to cover loyalty programs designed for specific uses, such as online sellers and restaurants. Finally, we looked at programs that even the smallest retailers or e-commerce sites could afford. Most offered affordable, entry-level platforms that could scale as a company grew.
In the end, businesses that make their customers feel special with reward programs are rewarded themselves with loyal customers willing to spend more and more often.
Harvard Business Review. "The Loyalty Economy" Accessed September 30, 2020.
Yotpo. "The State of Customer Loyalty in 2018." Accessed September 30, 2020.
Invesp. "Customer Acquisition Vs.Retention Costs – Statistics And Trends." Accessed September 30, 2020.