Stamps, points or cashback — which reward type should you run?

A stamp card works because of the gap. Once someone is four stamps into a six-stamp card, walking past you costs them something, and that feeling does the work no discount can. It is the cheapest mechanic to explain — every customer already understands it — and the fastest to run at a counter, because awarding one is a single tap.

The failure mode is a goal set too far away. A twelve-stamp card in a business people visit fortnightly is six months of effort for one free item, and customers do the arithmetic faster than you would like. Start lower than feels right; you can raise the goal for new cards later.

Points decouple the reward from the visit. Two customers who come in equally often but spend very differently get treated differently, which is usually the fairer outcome and always the more profitable one. Points also give you a currency to run campaigns in — double points on a quiet Tuesday costs you far less than a discount and moves more traffic.

The failure mode is opacity. If a customer cannot tell you roughly what their balance is worth, points stop motivating anything. Keep the rate round, keep the first reward cheap enough to be reachable, and print what the reward is on the card itself so it travels with them.

Cashback is the one to reach for when the realistic alternative is a discount. A five percent discount is five percent of margin gone at the till. Five percent back as balance is money that returns as a future visit, and a meaningful share of it is never redeemed at all — which is not a trick, as long as you say plainly what the balance is and where it can be spent.

The failure mode is treating it as a loyalty program on its own. Cashback earns quietly and gives customers no target, so it wants pairing with something that creates an occasion: a tier that unlocks a better rate, or a scheduled reminder that the balance is sitting there.

You can change the reward, the rate and the goal after launch, and existing cardholders keep the pass they already added — the card updates itself on their phone. That takes most of the risk out of the decision, so the real mistake is not picking the wrong mechanic; it is waiting months to pick one at all while the regulars you already have stay anonymous.