subject: Why Have Loyalty Cards? [print this page] It seems to be the in thing to have loyalty cards of some kind these days. Just about every retail store that you visit tries to get you to take a loyalty card or account of some kind with them. There are a number of reasons for this. We are going to take a look at a few of them.
Higher rate of returning customers
The retail market is a huge one and there are a lot of stores that compete for the same market or client base. This means that if a store or chain of stores wants to get ahead of the competition then they have to offer their clients something different. An incentive to shop there, if you will. This is what loyalty cards do. When a customer takes out a loyalty card then they are generally put onto a points system of some kind which allows them to accumulate points based on purchases made at the store. These points can then be used to make use of special offers or in lieu of cash at some point. This then motivates the client to continue shopping at the same chain of stores to accumulate more points and eventually to make use of the points. This increases the chances that a customer that liked the store enough to shop there the first time will return to shop there.
Increased profitability
The loyalty card point system often is a very nominal expense to the store or chain of stores offering the service. The points will have to accumulate for quite some time before they are actually worth enough to make cashing them in worthwhile. What this means is that, in order to get the points and have something to cash in the customers have to spend more. This means that the store makes more money.
Special offers
The aspect of increased profitability is a really great incentive for the store to have special offers for loyalty card holders as these will benefit both the store and the customer. The customer will be encouraged to spend more at the store and the store will thus make more money even though they are offering additional points for certain purchases or are offering discounts to loyalty card holders.
A loyalty card system will give a store a lot of leeway when it comes to offering things to their customers. They do not have to offer cash rewards or anything like that, they can offer bonus points for certain purchases if they need to move stock of that item to make room for new stock on the shelves. This means that the store does not have to discount items they want to move to below cost.
A loyalty card system is a really great way for a store to increase its returning customer base and to increase its profitability and ability to move stock. Both the customer and the store benefit from this kind of system. It may cost the store a little to get it set up, but they will recoup those costs in next to no time.
