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Customer Loyalty Programs That Work

April 16, 2012

Loyalty programs can be a great way for businesses to improve consumer perception and enhance sales. Many businesses can benefit from a loyalty program; it’s possible for companies ranging from gyms to restaurants to incorporate an incentives-based program. When creating a loyalty program, it’s important to use ID systems that can accurately identify high-value customers quickly and easily. The following guide discusses how loyalty programs and ID systems can be beneficial to a wide variety of businesses.

Loyalty cards are used to generate repeat business. While loyalty programs can be a great idea, a poor implementation can be subject to fraud. It’s important for businesses to manage the cost of a loyalty ID system against the potential cost of fraudulent use.

One of the most common loyalty programs in the United States was created by Subway Restaurants, a franchise of Doctor’s Associates. In this loyalty program, users could receive a free sandwich after a specified number of purchases. The customer would receive a paper card with punched holes or stamps. Since different franchises used different methods to record a purchase, many customers would have several different types of purchase verification marks on a single loyalty card. Because of a lack of a central verification system, many people would create fraudulent marks to indicate a purchase. After several years of growing fraud, Subway shut down its loyalty program.


While punch cards can be effective for a low-value, low-margin business, they have several disadvantages. In addition to fraud, the loss of a loyalty card will result in the loss of accrued benefits for a customer. This can create a negative perception of a brand in a customer’s mind.

When creating a loyalty card system, it’s important to use a digital system for recording points or other accrued benefits. A reverse transfer printer or a direct-to-card (DTC) printer can be great tools for creating ID cards with verifiable rewards.

For example, an ID card can be embedded with a bar code, magnetic stripe, or other unique marker. When purchasing a product or service, this card can be scanned. The number of accrued reward points or benefits are stored in a central cloud database. Since accrued benefits aren’t stored in a physical medium, there is no danger of loss to the consumer. In addition, a business is protected from counterfeiting fraud.

Loyalty cards have expanded to many new uses over the past few years. One of the newest loyalty card systems is used in Africa. In South Africa, health insurance companies offer discounts for people who visit a gym on a regular basis. Since it can be difficult to verify this, a gym card with an RFID chip can ensure one is visiting a gym on a regular schedule. Based on an individual’s loyalty, he or she may receive a discount on an insurance policy.

New advances in technology offer many benefits for businesses with a loyalty system.

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Image by Pure Metal Cards and licensed through Creative Commons.

Mike Gardner is a sales representative at CardPrinter.com, an online retailer carrying the leading brands of ID card printers. Visit the CardPrinter website to buy the Fargo DTC4500 double sided ID printer or the Evolis Zenius Card Printer to get started printing badges today!

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