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How Much Does it Cost to Start a Loyalty Card Program?

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Consumer Loyalty Program Prices

The most common use of gift card programs is to create plastic gift cards with cash value. While gift card systems are an excellent means for promoting your brand and generating additional sales, you can also employ a consumer loyalty program or membership rewards program to achieve similar results.

Loyalty and reward programs can be used as an alternative to traditional gift cards. Also, you can set up a single card to manage more than one program (a gift card and a loyalty card, for example). This buying guide explains the difference between reward and loyalty programs, how they can benefit your business, and how much they cost.

Comparing Consumer Loyalty Programs and Membership Rewards Programs

Although similar, these two consumer incentive programs offer slightly different benefits to customers.

  • Customer loyalty programs: A loyalty rewards program uses a "points for dollars" system that earns shoppers credit each time they make a purchase. The accrued points have a cash value which can be redeemed for future purchases at your business.
  • Membership reward programs: This type of customer reward program allows members to save money through access to exclusive discounts.

Why You Should Use Customer Rewards Programs

Customers aren't the only ones that benefit from a reward card program. Loyalty and membership cards can be a boost to your business in the following ways:

  • Enhance your brand: By giving customers a custom designed rewards card with your business' name and logo, you are placing a tiny billboard in their wallet or on their keychain. This presents a unique marketing opportunity as customers use the card and increasingly associate your business with saving money.
  • Better understand consumer behavior: When membership and loyalty cards are swiped, tracking software compiles purchasing information. Over time, this can help you more effectively target your advertising and marketing campaigns.
  • Increase sales: By offering exclusive deals to members, customer reward programs can entice them to make additional purchases.

Customer Rewards Programs Average Costs

A consumer loyalty card program or membership rewards program offers outstanding returns on a relatively small investment. Here's how much you can expect to pay to begin a rewards programs.

  • To get started, you'll need gift cards. They are typically priced at around $.50 to $1.00 per card. You'll also need gift card software, approximately $300 to $400 per location if processing is done through a PC POS system. It will cost an average of $50 to $75 per location if you're using credit card terminals for processing.
    • Most vendors will supply a display rack with your initial order and may also provide additional marketing materials.
    • Note that in general, the more cards you purchase, the cheaper they will be per unit.
  • Other costs include transaction fees which are usually around $.10 to $.75 each time a rewards account is activated. Also, monthly program maintenance fees are roughly $20 to $40 per month with a 1 to 3 year contract.

Customer Rewards Programs Sample Costs

Here's what businesses nationwide paid to start customer loyalty card and membership rewards card programs:

  • A Florida retailer paid around $1 per card for 500 cards, including shipping.
  • A Connecticut association's partner paid approximately $.70 per card, including custom card layout and design.
  • A South Dakota photographer paid about $.85 per card for 500 color cards.

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