Digital stamp card: how it works at the counter and what it costs

What a digital stamp card is

The logic is the same as always: every purchase earns a stamp and, after a certain number, the customer gets a reward. What changes is the medium. The card lives on the phone and every stamp is recorded in a system, so besides counting stamps you know who comes in, how often and to which location.

Google and Apple each have their own format for this. Google presents the loyalty cards in its Wallet as a way for customers to see their points and rewards on their phone (Google Wallet documentation). Apple groups them under its "store cards" and notes that the pass can be updated to show the current balance (Apple Wallet for developers). The technical details are in the guide to Google Wallet and Apple Wallet for business.

How it works step by step

Seen from a coffee shop counter, the typical flow looks like this:

1. The shop has a QR code on display, at the register or on the tables.
2. The customer scans it with their phone camera and signs up with a few details.
3. The card is saved to Google Wallet (Android) or Apple Wallet (iPhone). Anyone who doesn't use Wallet can open it in their browser.
4. With each purchase, the customer shows their code and someone on staff scans it to add the stamp.
5. The pass updates on the customer's phone with the new count.
6. Once the card is full, the customer redeems the reward and the count starts over.

Step 4 has variations. Google supports two redemption methods for its loyalty cards: holding the phone to an NFC reader, or scanning a barcode, either static or rotating, which usually changes every minute (redemption methods in Google Wallet). In a small shop, scanning the code with a phone is usually enough and saves you from buying a reader. Apple, for its part, lets you notify the customer when their pass changes (Apple loyalty passes).

What a stamp program costs

The software price is only part of it. It pays to look at all the costs together, because the paper card looks free and isn't.

• Monthly software. Some platforms charge per location or by number of customers; check how the price changes if you open another shop.
• Setup. Card design, loading your brand and staff training. Some providers charge for it separately.
• Hardware. Scanners or tablets. If the stamp is added with a phone you already own, this cost disappears.
• Printing. With paper it keeps coming back: cards, rubber stamp, ink. With digital, all that's left is the sign with the QR code.
• The reward. It's the cost people forget most, and the one that weighs most over time.

Calculate the reward at cost, not at its menu price. Giving away a coffee you sell for USD 3 doesn't cost you USD 3: it costs you the ingredients and a bit of your staff's time.

Example: the cost of the reward per visit

An example with hypothetical numbers. Your coffee sells for USD 3 and the ingredients cost you USD 0.90. The card asks for 8 stamps and the reward is a coffee.

1. The customer pays for 8 coffees, which add up to USD 24.
2. On the ninth visit they get a free coffee, which costs you USD 0.90.
3. Reward cost per paid visit: 0.90 ÷ 8 = USD 0.11.
4. As a percentage of sales: 0.90 ÷ 24 = 3.75%.

That 3.75% is the ceiling, because not every customer fills their card.

Now add the software. For example, if the platform costs USD 30 a month and your staff adds 500 stamps that month, that comes to USD 0.06 per stamp. Each recorded visit then costs you about USD 0.17. To know whether it's worth it, compare that figure with what you earn on a visit that wouldn't have happened without the card. If you run a coffee shop, there's a dedicated guide to a coffee shop loyalty program.

How many stamps to ask for

With few stamps, the reward gets expensive per visit. With too many, the customer sees it as far off and stops collecting. The calculation above lets you try 6, 8 or 10 stamps before you print the sign.

There's one trick that doesn't change the cost. In 2006, Joseph Nunes and Xavier Drèze published a study in the Journal of Consumer Research on the "endowed progress effect": when an eight-step task is presented as a ten-step one with two steps already done, people feel they've already started, they're more likely to finish it and they finish it sooner (The Endowed Progress Effect). On a card, that would be a 10-stamp card handed out with 2 free stamps at sign-up. The customer still pays for 8 purchases before the reward.

Paper, your own app or a Wallet pass

Your own app makes sense for chains that already have reasons to be on the customer's phone. In a single shop, asking for a download in the middle of the line usually slows sign-ups down. If you use paper today and want to go digital, look at the alternatives to paper punch cards for bakeries.

Where Club Card fits

Club Card follows the Wallet pass model for local businesses in Latin America. Staff add the stamp with the shop's phone and every stamp is saved with the date, the location and who added it. The Basic plan costs USD 30 a month, with no setup fee and no contract. A bakery in Tucumán with two locations uses it with a free reward at 8 stamps (see the case study); the plans are on the pricing page.

Once the customer has the card, the work shifts to getting them to come back: that's covered in how to get your customers to come back.

Frequently asked questions

Sources

• Loyalty cards, Google Wallet API
• Redeem a Loyalty card, Google Wallet API
• Wallet, Apple Developer
• Loyalty passes, Apple Developer
• The Endowed Progress Effect: How Artificial Advancement Increases Effort, Nunes and Drèze (2006), Journal of Consumer Research
• Prohibited & restricted content, Google Maps User Generated Content Policy