Loyalty glossary: stamp cards, loyalty clubs, prepaid passes and 35 more terms

A stamp card rewards repeat visits with one stamp per purchase and a reward when the card is full. A prepaid pass is something else: the customer pays upfront and uses it up visit by visit. A loyalty club is a membership, and loyalty card is the umbrella term for cards that reward regulars. Here we explain 38 terms that small businesses come across when they work with loyalty.

Each term has one sentence explaining what it is and one sentence on what it means for you in practice. The terms are grouped by topic, so you can jump straight to what you are looking for.

The difference between a stamp card, a prepaid pass, a points card and a loyalty club

Types of card

Stamp card

A stamp card, also called a punch card, is a card where the customer gets a stamp for every purchase or visit and a reward when the card is full. It is the simplest form of loyalty programme and works best when customers come often and spend roughly the same amount each time.

Digital stamp card

A digital stamp card is the same thing as a paper card, but it sits on the customer's phone and is stamped when your staff scan it. What many people call a digital stamp card, we call a loyalty card. Read more in What is a digital stamp card.

Prepaid pass

A prepaid pass is a card where the customer buys a number of visits or items in advance and uses them up one at a time. A prepaid pass is not a stamp card: it is a payment product, so ask your accountant how the advance payments should be recorded.

Rewards card and points card

A rewards card, or points card, gives customers points based on how much they spend, and the points can be exchanged for a discount, a voucher or a product. It suits businesses where the amount spent varies a lot, but it is harder for customers to keep track of than a stamp card.

Loyalty card

Loyalty card is the umbrella term for cards that reward returning customers, on paper or on the phone. When you compare services, this is usually the word you will find them under, even if customers themselves say stamp card.

Membership card

A membership card shows that the customer belongs to a loyalty club and is used to claim the member's perks. A digital loyalty card can work as a membership card, because it identifies the customer every time it is scanned.

Gift card and stored-value card

A gift card or stored-value card is a prepaid amount that can be used as payment, often bought by someone other than the person who uses it. Like the prepaid pass, it is a payment product, not a reward, and it has its own rules on expiry and accounting.

Programmes and rewards

Loyalty programme

A loyalty programme, or loyalty program, is a business's system for rewarding customers who come back, with rules for what earns stamps or points and what the reward is. Which setup suits you depends on how often customers come and how much they spend. We compare the types in Loyalty programmes for small businesses.

Loyalty club

A loyalty club, or customer club, is a membership the customer joins, usually for free, and gets perks and offers in return. A loyalty card in Wallet can work as a simple loyalty club. We describe how to get started in Start a loyalty club without an app.

Regular

A regular is a customer who comes back often, usually with the same order or to the same hairdresser. Regulars carry the day-to-day trade of many local businesses, and they are the people a loyalty programme should reward.

Stamp

A stamp is a mark on the card showing that the customer has made a purchase or visit that counts. Decide in advance whether it is one stamp per visit or only above a minimum spend, and put it in the terms.

Reward

The reward is what the customer gets when the card is full, such as a free coffee or a discount on the next treatment. It should be worth chasing for the customer but not cost you too much, so work out what it costs you before you decide.

Redemption

Redemption is when the customer uses their reward and your staff record that it has been used. With a digital card, the redemption is recorded in the system straight away so the same reward cannot be used twice, and in Stampioo a new card starts automatically.

Welcome offer

A welcome offer is something the customer gets as soon as they join, such as a first stamp or a small discount. It makes it easier to say yes at the till, because the customer gets something today.

Tiered programme

A tiered programme divides members into levels, such as bronze, silver and gold, where a higher level gives better perks. It takes more admin and is most common in businesses with many large purchases, such as airlines and hotel chains.

Paid membership

A paid membership is a loyalty club where the customer pays a fee for perks, such as lower prices or free delivery. The perks need to be clearly worth more than the fee, or customers soon cancel.

Cashback

Cashback means the customer gets part of the amount spent back, as money or as credit towards the next purchase. For a small business it is in practice a discount after the fact, and it often feels less like a reward than a specific item does.

Wallet and technology

Apple Wallet

Apple Wallet is the wallet app that comes built into the iPhone and stores payment cards, tickets and loyalty cards. Because it is already on the phone, customers do not need to download anything to save your card in Wallet.

Google Wallet

Google Wallet is Google's equivalent for Android phones, where customers save cards, tickets and loyalty cards. A digital loyalty card should work in both Apple Wallet and Google Wallet, so every customer can join.

Pass

A pass is the technical name for a card or ticket stored in Wallet. A pass can be updated after it has been added, which is why new stamps, a changed reward or a new design show up without the customer having to add the card again.

QR code

A QR code is a square code the phone camera can read to open a link or show information. In a loyalty programme it is used both for customers to join and for your staff to scan the card and add a stamp.

NFC

NFC is a technology for wireless communication over a few centimetres, the same one used for contactless payment with a phone. Some loyalty solutions use NFC to add stamps, while Stampioo adds stamps by scanning the card's QR code.

Scanner

The scanner is the tool your staff use to read the customer's card and add stamps. In Stampioo the scanner opens in the browser on a phone or tablet, so no extra hardware is needed.

POS integration

A POS integration connects the loyalty programme to your till system, so stamps or points are recorded automatically at payment. It sounds convenient, but it requires your till system to be supported. Stampioo works independently of your till system and needs no integration.

Push notification

A push notification is a short message that appears on the phone's lock screen, for example when the customer gets a stamp or when you send an offer. Unlike a text message, a notification through Wallet costs nothing per message, but it should be used sparingly so customers do not delete the card.

Location reminder and geofence

A geofence is a virtual area around an address, and a location reminder is the notification that appears on the lock screen when the customer is nearby. Apple Wallet and Google Wallet monitor at most ten addresses per card, so choose your most important locations.

Metrics and analysis

Visit frequency

Visit frequency is how often a customer comes back over a given period, for example twice a month. It decides how many stamps the card should have: the less frequent the visits, the fewer stamps you need so the reward does not feel too far away.

Churn

Churn is the share of customers who stop coming over a given period, often measured per month or quarter. A digital card shows who has not been back for a while, so you can reach them with an offer before they disappear for good.

CLV, customer lifetime value

CLV, customer lifetime value, is how much a customer spends with you over the whole time they are your customer. If a customer buys €5 of coffee a week for two years, their CLV is just over €500 in revenue, and that helps you see how much a reward can cost.

Redemption rate

The redemption rate is the share of started cards that actually lead to a redeemed reward. If it is very low, the reward may be too far away or not interesting enough, and it is worth reviewing the number of stamps for your next programme.

Active members

Active members are the people who have used the card during a chosen period, such as the last 90 days. That figure tells you more than the total number of members, which only ever goes up.

Average spend

Average spend is the average amount per purchase or visit. It decides how much the reward can cost you and whether one stamp per visit or a minimum spend suits you best.

Segmentation

Segmentation means dividing customers into groups, such as new customers, regulars and those who have not come back. With the groups you can send the right offer to the right customers. In Stampioo, segmentation and in-depth analytics are included in Pro.

Legal terms

Data controller

The data controller is whoever decides why and how personal data is processed, and for a loyalty club that is you, the business owner. The responsibility stays with you even when the data is stored with a supplier.

Data processor

A data processor processes personal data on your behalf, such as the provider of your loyalty card system. The processor may only process the data according to your instructions, while the responsibility stays with you as the data controller.

Consent

Consent is the customer's freely given, active yes to a specific use of their data, such as receiving offers by email or text message. A pre-ticked box does not count, and customers must be able to withdraw their consent as easily as they gave it.

Data minimisation

Data minimisation is the GDPR principle that you may only collect the data you need for the purpose. In practice, it means you only ask for an email address, phone number or birthday if you have a plan for them.

Right to erasure

The right to erasure means that in many cases a customer can ask you to delete the data you hold about them. Have a routine for how that works, and make sure your loyalty card provider can delete a customer's data when you ask.

The terms fit together: a loyalty programme is your setup, the loyalty card is what the customer carries, stamps and rewards are the engine, and the metrics show whether it is working. Start with a simple stamp card, keep an eye on repeat visits and build on it once you see what your customers respond to.