Restaurant loyalty programmes: points, tiers or prepaid credit?

Restaurant loyalty programmes mostly use one of five mechanics: stamp cards, points on spend, tiers, prepaid credit or member pricing. Stamps and points reward frequency at a predictable cost. Tiers give your best regulars status. Prepaid credit brings cash in early and gives guests a reason to come back, while member pricing suits venues where guests will pay a fee for a lower price on every visit.

Which one fits depends on how often your guests visit and how much margin you can give away on each visit. You can also combine them.

How do stamp cards work?

A stamp card gives a free item after a set number of purchases: buy nine coffees and the tenth is free. Guests understand it immediately, and it suits cafés, bakeries and lunch spots where people buy the same thing often. The cost is easy to work out. One free item in ten is a 10% discount on those items for guests who complete the card.

The weaknesses are data and fraud. A paper card tells you nothing about who the guest is, and stamps are easy to fake. A digital stamp card deals with both, but the guest has to identify themselves at every purchase.

How do points-based loyalty programmes work?

Points programmes give guests a currency they earn on spend and redeem for credit or rewards. Two numbers set the cost: the earn rate and the redemption rate. Earn one point per £1 and redeem 100 points for £5, and you are giving back 5% of spend to guests who redeem. A minimum redemption threshold stops tiny redemptions, and points that expire after a period of inactivity limit how long the liability sits on your books.

Points work across a wider range of venues than stamps because they scale with spend. The downside is that small balances feel worthless: a guest with 40 points (£2 at that rate) has little reason to care. A signup bonus gets new members closer to their first reward.

When do loyalty tiers make sense?

Tiers group members by spend or visits over a period and give higher tiers better benefits. A restaurant might move guests to a second tier after £500 of spend in a year and a third after £1,500. Good tier benefits often cost little: priority booking on busy nights, early access to tasting menus or a higher points rate.

Tiers add complexity. Guests need to understand where they stand, and you need a policy for what happens when someone's spend drops. Decide in advance whether guests move down a tier when spend falls, and tell them before it happens.

How does prepaid credit work as a loyalty programme?

With prepaid credit, guests load money onto an account and spend it at your venue, often with a bonus: load £200 and get £220 to spend. You receive the cash upfront and the guest has a balance that brings them back. The bonus is a real cost (here 10% of the amount loaded, or about 9% of what the guest can spend), and you need clear terms on expiry and refunds.

Prepaid credit can also count as a voucher for VAT purposes. HMRC's VAT Notice 700/7 sets out the tests (one is that the credit can be transferred by gift) and treats single-purpose vouchers, where VAT is due when the voucher is sold, differently from multi-purpose vouchers, where it is due on redemption. Agree the VAT and accounting treatment, including for bonus credit, with your accountant before launch.

Member pricing and paid memberships

Member pricing gives a lower price on some or all of the menu to guests who hold a membership, which may be free or paid. A paid membership brings recurring revenue and a strong reason to visit, because members want their fee's worth. It works when the saving is easy to see and members use it often enough to justify the fee. A wine club with member prices on selected bottles is one restaurant version.

Points, tiers or prepaid credit: which should you choose?

Points and tiers pair naturally, and prepaid credit sits comfortably alongside either. Check how the discounts stack before launch. A top-tier member paying with bonus credit for a member-priced dish can end up with a margin you would never have agreed to on purpose.

How do you know if a loyalty programme works?

Comparing members with non-members flatters any programme, because your most loyal guests are the ones most likely to join. Compare the same guests before and after joining, or hold back a small group from an offer and compare their visits. Track the cost of rewards as a share of member revenue, the share of points or credit redeemed and how many members lapse each year. Our guide to customer lifetime value shows how to put a number on what a retained guest is worth.

How Tiquo supports member pricing and prepaid credit

In Tiquo, each membership plan has its own price, billing interval and permissions, and a plan can be free or paid, so the same tool covers a free sign-up scheme and a paid membership. A plan assigned to a company passes to the customers linked to that company.

For prepaid credit, staff can add store credit to a customer or company profile in Tiquo, and each profile shows the balance alongside a transaction history of every issue, adjustment and refund.

Members can add a digital membership card to Apple Wallet or Google Wallet, and when staff scan it they see the guest's profile and whether the membership is still active. To check whether a scheme is working, segments can filter guests by total spend, last visit date and active membership, and customer profiles show historic and predicted lifetime value side by side.