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REWARD and LOYALTY CARDS
Loyalty programs are structured marketing efforts that reward, and therefore
encourage, loyal buying behaviour - behaviour which is potentially of benefit to
the firm.
In marketing generally and in retailing more specifically, a loyalty card,
rewards card, points card, or club card is a plastic or paper card, visually
similar to a credit card or debit card, that identifies the card holder as a
member in a loyalty program. Loyalty cards are a system of the loyalty business
model. In the United Kingdom it is typically called a loyalty card, in Canada a
rewards card or a points card, and in the United States either a discount card,
a club card or a rewards card. Cards typically have a barcode or magstripe that
can be easily scanned, and some are even chip cards. Small keyring cards are
often used for convenience.
A retail establishment or a retail group may issue a loyalty card to a consumer
who can then use it as a form of identification when dealing with that retailer.
By presenting the card, the purchaser is typically entitled to either a discount
on the current purchase, or an allotment of points that can be used for future
purchases. Hence, the card is the visible means of implementing a type of what
economists call a two-part tariff.
The card issuer requests or requires customers seeking the issuance of a loyalty
card to provide a usually minimal amount of identifying or demographic data,
such as name and address. Application forms usually entail agreements by the
store concerning customer privacy, typically non-disclosure (by the store) of
non-aggregate data about customers. The store — one might expect — uses
aggregate data internally (and sometimes externally) as part of its marketing
research.
Where a customer has provided sufficient identifying information, the loyalty
card may also be used to access such information to expedite verification during
receipt of cheques or dispensing of medical prescription preparations, or for
other membership privileges (e.g., access to a club lounge in airports, using a
frequent flyer card).
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