Every loyalty term, in plain words.

Loyalty software borrows vocabulary from retail, from marketing and from accounting, and uses several of the words to mean something narrower than they mean elsewhere. These are the definitions as they are used on this site and in the trade generally.

Loyalty card

A card that identifies a returning customer and records their progress toward a reward. It may be plastic, paper or digital; the format changes where the record is kept, not what the card is for.

Also called: Rewards card, Membership card, Customer card

Stamp card

A loyalty card that earns one mark per qualifying visit or purchase, where a fixed number of marks completes the card and unlocks a reward. The free tenth coffee is the archetype.

A stamp card treats every qualifying visit as equal, which is what makes progress readable at a glance and separates it from a points card.

Also called: Punch card, Buy-ten-get-one card, Digital stamp card

Points card

A loyalty card that awards points in proportion to the amount spent, which the customer accumulates and exchanges for rewards. Unlike a stamp card, the reward is not tied to a number of visits.

Points are fairer when basket sizes vary widely, and harder for the customer to read: they have to know the conversion rate before they can tell how close they are.

Also called: Points programme, Points balance

Reward

What the business gives a customer for completing a card or spending accumulated points. It is chosen by the business, and it is the part of a loyalty programme that decides whether customers take part.

Also called: Redemption item, Loyalty reward

Reward programme

The whole standing arrangement: what earns credit, how much credit completes a card, what the reward is, and where it can be claimed. The card is the customer's view of it.

Also called: Rewards scheme, Loyalty programme

Customer retention

Keeping existing customers coming back, as opposed to acquisition, which is finding new ones. For a business with a fixed catchment area it is usually the cheaper source of additional revenue.

Also called: Repeat business, Customer loyalty

Retention rate

The share of customers active at the start of a period who are still active at the end of it. It answers whether the people you had are still coming, which total sales cannot.

Also called: Repeat rate

Churn

The share of customers who stop coming over a period. It is the inverse of retention rate, and in a local business it is usually silent — a lapsed regular does not cancel anything, they simply stop appearing.

Also called: Attrition, Lapsed customers

Visit frequency

How often a given customer buys within a period. It is the number a loyalty programme is trying to move, and comparing it before and after a customer joins is the honest test of whether the programme works.

Also called: Purchase frequency, Visits per customer

Completion rate

The share of started cards that reach the required number of stamps. A low completion rate means the card is too long for how often customers actually visit, or the reward is not worth the trip.

Also called: Card completion, Fill rate

Redemption

The moment a customer exchanges a completed card or a points balance for the reward. It is when the programme's cost is actually incurred, which is why redemption and completion are counted separately.

Also called: Claiming a reward, Cashing in

Breakage

Earned rewards that are never claimed. Breakage lowers the real cost of a programme, and a business that budgets on the assumption that every reward is redeemed will over-provision.

High breakage is not good news. It usually means the reward was not worth returning for, which is the same problem as a low completion rate wearing a different label.

Also called: Unredeemed rewards, Slippage

Enrollment

The moment a customer joins the programme and gets their card. In practice it has to happen at the counter, in seconds, or most of the people who would have joined do not.

Also called: Signup, Joining, Opt-in

Loyalty club

A loyalty programme framed as a membership: customers join, and membership carries benefits beyond a single card, such as members-only offers. The word describes the framing rather than a different mechanic.

Also called: Customer club, Members programme

Check-in

The action that records a customer's visit and issues their stamp — typically the customer scanning a QR code at the counter and a staff member approving it.

Approval sitting with staff rather than with the customer is what stops a card being stamped by someone who never came in.

Also called: Scan, Stamping

QR code

A printed square barcode a phone camera reads, used here to open a business's join page or to issue a stamp. It removes typing from the counter, which is what makes enrollment fast enough to happen at all.

Also called: Scan code, Enrollment code

Add to home screen

Saving a web page as an icon on a phone's home screen, where it opens full-screen without browser chrome. It gives a loyalty card the feel of an app without an app-store download, an account install or an update cycle.

Also called: Progressive web app, PWA, No-download app

Cost of goods

What a reward actually costs the business to provide, as opposed to the price it is sold at. The gap between the two is why a free coffee is a generous-feeling reward with a small real cost.

Also called: COGS, Unit cost, Marginal cost

Customer lifetime value

The total margin a business expects from a customer across the whole relationship. Retention raises it by extending the relationship; a discount lowers it on visits that were going to happen anyway.

Also called: CLV, LTV

First-party data

Information a business collects directly from its own customers, with their consent, rather than buying it or renting it from a platform. A loyalty programme is one of the few ways a small business gathers any.

Also called: Owned data, Direct customer data

Multi-location validity

Whether a card earned at one of a business's locations can be stamped or redeemed at the others. It is a decision the business makes when setting up the programme, not a property of the card format.

Also called: Cross-branch, Chain-wide card