Work out what it costs before you launch
The effective discount of a points program is the earn rate times the reward value. One point per $1 spent, with each point worth $0.05, gives back 5% of spending. One point per $1 at $0.01 a point gives back 1%. Most small retailers and cafes land between 2% and 5%. Anything much lower is easy to ignore; anything much higher eats margin.
Not every point is redeemed. Some customers never reach the minimum and some points expire. That breakage lowers the real cost, but do not plan on it: a program that only works if customers fail to use it will annoy the ones who do.
Limits that protect margin
Minimums keep the program sensible. A minimum order to earn stops points on a single pack of gum. A minimum order to redeem stops a customer using $10 of points on a $10.50 order. A minimum number of points to redeem gives customers a milestone to aim for. A maximum per order caps how much one sale can be discounted.
Expiry matters for the books. Unredeemed points are a promise of future discounts. An expiry period, such as 12 months, keeps that promise from growing forever and gives customers a reason to come back.
Make it easy at the counter
Points only work if the customer is attached to the sale. Train staff to ask for a phone number or name at the start of every checkout, not after payment. Tell customers their balance on the receipt or out loud when they pay. Keep the rule simple enough to explain in one sentence: 'one point for every dollar, and 100 points is $5 off'.
Measure it
Each month look at the points issued, points redeemed and the sales from customers in the program compared with everyone else. If redemptions are rising and visits are not, the program is a discount, not a loyalty tool. If visits are up and redemptions are steady, it is working.
Doing it in SeroPOS
SeroPOS calls this Reward Points. The settings are in the app under Admin, then Settings, then Reward Points, and in the back office under Business Settings, then Reward Point Settings.
- Enable Reward Points, and set a Reward point display name such as Points or Stars.
- Earning: Amount spent for 1 point, Minimum order total to earn, Maximum points per order (0 means no limit).
- Redeeming: Redeem value of 1 point, Minimum order total to redeem, Minimum points to redeem, Maximum points per order.
- Expiry: Points expire after a number of months or years (0 means they never expire).
- At the till, add the customer before paying. Points are added automatically when the sale completes.
- To redeem, use Points on the payment screen (Available and Points to Redeem) or Loyalty in QSR Adjust Order.
- The customer's record in the back office has a Reward Points tab with points earned and redeemed.