Glossary

Loyalty and wallet glossary

Plain definitions for the terms that come up when you set up a digital loyalty programme.

Wallet card: A wallet card is a digital card stored in Apple Wallet or Google Wallet (the same place people keep boarding passes, event tickets and payment cards) that can update itself remotely after it has been issued.
Apple Wallet: Apple Wallet is the app pre-installed on every iPhone that stores payment cards, boarding passes, tickets and loyalty cards, and it can display and update loyalty cards without any additional app.
Google Wallet: Google Wallet is the Android equivalent of Apple Wallet, storing payment methods, tickets and loyalty cards, and supporting the same kind of remotely updatable loyalty card.
Stamp card: A stamp card is a loyalty mechanic that rewards a fixed number of visits, one stamp per visit (buy ten coffees, get the eleventh free), and is the digital successor to the paper punch card.
Punch card: A punch card is the paper ancestor of the digital stamp card, physically marked with a hole punch or rubber stamp at each visit.
Points programme: A points programme awards points in proportion to how much a customer spends (typically one point per unit of currency) and unlocks a reward once a threshold is reached.
Visit-based loyalty: Visit-based loyalty rewards a customer for the number of times they come in, regardless of how much they spend on each occasion. Loonine implements this as a stamp card with one stamp per visit.
Customer retention: Customer retention is the share of customers who return to a business over a given period, and it is usually far cheaper to improve than customer acquisition.
Churn: Churn is the rate at which customers stop returning, and in a local business it is usually silent: customers rarely announce they have left, they simply stop appearing.
Lapsed customer: A lapsed customer is someone who used to visit regularly but has not returned within an expected window, commonly 45 days for a café (the Loonine default, adjustable from 1 to 365 days in the app), or two visit cycles for an appointment business.
Win-back campaign: A win-back campaign is a message sent specifically to customers who have stopped visiting, with the aim of restarting the habit before it is fully broken.
Push notification: A push notification is a short message delivered directly to a phone's lock screen; in wallet loyalty it is sent to the card itself rather than through a separate app.
Card certificate: A card certificate is the cryptographic credential, issued in a business's name, that signs its wallet cards and proves to Apple or Google that the card is legitimate.
Enrolment rate: Enrolment rate is the percentage of customers who join a loyalty programme when offered it, and it is the number that determines whether the programme is worth running.
Friction: Friction is any step that stands between a customer and joining a loyalty programme, and each additional step measurably reduces how many people complete it.
No-app loyalty: No-app loyalty is any loyalty programme that does not require the customer to install software, typically by delivering the card to the phone's built-in wallet instead.
Retention rate: Retention rate is the proportion of customers from one period who return in the next, and even a small increase compounds substantially over a year.
Customer lifetime value: Customer lifetime value is the total revenue a business expects from one customer across the whole relationship, rather than from a single transaction.
Reward threshold: The reward threshold is the number of stamps or points a customer must reach before earning a reward, and setting it correctly determines whether the programme motivates or discourages.
Goal-gradient effect: The goal-gradient effect is the observed tendency for people to accelerate their effort as they get closer to a reward, which is the psychological mechanism a stamp card relies on.
Welcome credit: A welcome credit is a head start given to a new member (for example two stamps awarded at sign-up) used to trigger the goal-gradient effect immediately rather than from zero.
GDPR consent: GDPR consent is the freely given, specific and recorded permission a business must obtain before processing an EU customer's personal data for a loyalty programme.
Data controller: The data controller is the organisation that decides why and how personal data is processed; in a loyalty programme this is the business running the programme, not the software vendor.
Data processor: A data processor handles personal data on behalf of a controller and only under its instructions; a loyalty platform is a processor acting for the business that uses it.
Digital loyalty card: A digital loyalty card is a loyalty card held on a customer's phone rather than on paper, most commonly as a card in Apple Wallet or Google Wallet, which records progress towards a reward and updates itself when the business adds to it.
Redemption rate: Redemption rate is the share of earned rewards that customers claim, and a low rate is a warning rather than a saving: it usually means the threshold is too high or the reward is not wanted.
Breakage: Breakage is the value of loyalty rewards that are earned but never claimed, and it is the gap between what a programme appears to cost and what it costs.
Points expiry: Points expiry is the rule that unused loyalty progress lapses after a set period, and it should be set from how often the business's own customers buy rather than copied from a larger scheme.
Loyalty tiers: Loyalty tiers are levels within a programme that unlock better benefits as a customer spends more, and they only mean anything once enough customers sit in each level for the distinction to be visible.
Coalition loyalty: Coalition loyalty is a scheme shared by many unrelated businesses, where customers collect one currency across all of them (Payback and DeutschlandCard in Germany, Nectar in the UK) and the scheme operator, not the business, owns the customer relationship.
First-party data: First-party data is information a business collects directly from its own customers, such as a phone number given at the counter, and in a loyalty programme it is the asset the programme produces.
Average transaction value: Average transaction value is the mean amount a customer spends per visit, and in a loyalty programme its variance, not its size, is what decides whether to count stamps or points.
Purchase frequency: Purchase frequency is how often a customer buys within a period, and its inverse, the typical gap between one customer's visits, is what sets every other number in a loyalty programme.
SMS enrolment: SMS enrolment is signing a customer up to a loyalty programme by taking their phone number and texting them the card link, so the customer does nothing at the counter but receive a message.
Double opt-in: Double opt-in is confirming a customer's agreement to be contacted a second time, through the channel itself, so that the business holds evidence the person who gave the number is the person who owns it.
Cohort analysis: Cohort analysis groups customers by when they first bought and tracks each group forward, which separates a retention problem from a recruitment one in a way a single overall figure cannot.