How much does a loyalty program cost you?

The give-back rate is what the reward is worth at your own price, divided by what a member must spend to earn it.

Take a stamp card of ten with a RM12 drink as the reward. The member pays for ten drinks, RM120, and gets one worth RM12: 10%. The same card is often described as one free cup in every eleven served, about 9%. One counts what you serve, the other what the member pays.

If your prices vary, work out the worst case. Ten RM9 drinks fill the card for RM90. If the reward is "a free drink" and your dearest is RM15, the rate is nearly 17%.

With Points, turn the reward into ringgit first. At 1 Point for every RM1, a reward that costs 250 Points takes RM250 of spending. If it is RM5 off, the rate is 2%.

A shorter card raises the rate: five stamps is 20%, twenty is 5%.

These rates are our division, from each operator's own pages, read on 10 October 2026. Only Padini states a percentage itself.

Tealive's home page said "Earn 1 Tpoint for every RM1 spent" on the same day, which would be 1%.

My Lotus's, a grocer, gives back a twentieth of what the ten-drink offer does. What you can afford to give back depends on what your reward costs you.

The rate is counted at your selling price. Your cost depends on who collects the reward.

If the member would not otherwise have bought the item, it costs you what it cost to make or buy. A RM12 drink that takes RM4 of coffee, milk, cup and lid costs you RM4. If the free drink replaces one the member would have paid for, you have lost a sale, and it costs you RM12. Money off costs what it says: RM1 off is RM1.

That is reasoning: we found no study that measures it. So every free item has a low figure and a high one, and you cannot see which applies to each cup. Carry both through the sum.

The numbers in this table are made up. Put your own in their place.

Line 6 is the answer: for each reward you hand over, the sales the card must have brought in that you would not otherwise have made. For the mini-market, RM5 is 2.5% on top of the RM200. Line 5 leaves out rent and wages, because they do not rise when you sell one more drink.

Over a month, say the café hands over 60 free drinks. They cost it between RM240 and RM720, and members paid for 600 drinks to earn them. Between 30 and 90 of those 600 must be drinks the card brought in: one in twenty at best, about one in seven at worst.

The best evidence that a card can clear that bar is a 2006 study of a campus café in the United States. Its card gave one free coffee after ten, and the researchers analysed 949 finished cards. The authors estimate that in a typical month members "purchased two more coffees than they would have" without the card "in order to earn one free coffee": eleven purchases a month where their starting pace gave nine.

Two extra for each free one clears line 6 of the café example even at its high figure. But it is one café, and the count covers only members who finished a card.

A study of a convenience store franchise followed customers after a program began. Those who were heavy buyers at the start "were most likely to claim their qualified rewards", yet the program "did not prompt them to change their purchase behavior". Customers who began as light or moderate buyers "gradually purchased more". We read it in the paper's abstract, which gives no sample size.

In the sum, the customer who already buys from you every morning collects free drinks at the high figure and brings no extra sales. Members with room to come more often have to pay for those rewards as well as their own. What a regular may give back is staying with you, which no monthly sum shows: see Is a loyalty program worth it for your business?

The campus café's researchers also bought back 73 unfinished cards. Those had been carried for 65 days on average, against about 25 for finished cards, and their owners had not sped up at all. The authors call such cards "breakage". An unfinished card costs you no reward and earns you nothing.

In native.cards it is also still owed. Points, Stamps and Visits do not expire, so a half-filled card can be finished next year. Budget as if every Point will be spent.

Among 322 listed companies that introduced a program between 2000 and 2015, sales and gross profit both rose within the first year. But the effects on gross profit did "not become significant until the second quarter" after launch, and their overall impact "lags substantially behind sales". These are large firms, and we read the paper's summary, not the full paper, so borrow the timing only: rewards go out from the first week, and the extra visits that pay for them take longer to show.

Open Rewards And Benefits under Programs. Once members have received rewards, a row of figures appears. They count rewards and members, not ringgit, so the multiplication is yours.

Extra visits are harder to see. Home shows Visits per visitor beside the figure for the period before. If it rises, members are coming more often, but it cannot say the card caused it: see How to test whether your program makes a difference.

Each reward has How many can be given in total, which starts at No limit. Set a number and the reward stops there: "Every one given counts, even if it is later cancelled, used or expired." A limit of 100 on a reward that costs you RM25 can never cost more than RM2,500. Set it when you add the reward, because a reward "can’t be edited once added".

The rate is harder to change. On a Stamp card it is Stamps to fill a card, from 2 to 20, and "Earning rules on a live program can't be changed here." On a Points program the rate sits in each reward's cost, under It costs. To change it, add a new reward at the new cost; an owner or admin can then take the old one off with Remove from offer.