Glossary
What is 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.
Set the threshold too high and customers never believe they will reach it, so it has no effect on behaviour. Set it too low and you erode margin without changing anything, because customers would have returned anyway. For most cafés ten stamps works; bakeries and juice bars usually do better at eight; appointment businesses typically land between five and six visits.
How is the threshold chosen?
Set it so a typical customer reaches it in roughly two to three months at their existing visit rate. That window is long enough for the programme to pay for itself and short enough that the customer can see the finish line from the start.
| Business | Typical visit rate | Suggested threshold |
|---|---|---|
| Café | 2 to 3 per week | 10 stamps |
| Bakery | 2 to 4 per week | 8 stamps |
| Restaurant | 1 to 2 per month | Points, ~200 |
| Barbershop | Every 3 to 5 weeks | 6 visits |
| Hair salon | Every 6 to 8 weeks | 5-6 visits |
When should it be changed?
Review after three months against one number: the share of enrolled customers who have reached at least half the threshold. Below about a quarter, it is too high. If nearly everyone completes cards quickly, you are discounting rather than retaining and should raise it.
Changing the threshold does not require reissuing cards on a wallet-based system: existing cards update in place.
See also
- 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.
- 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.
- 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.
Further reading
How many stamps should a loyalty card have?
Setting the reward threshold too high kills motivation and too low erodes margin. Here is how to pick the number for your business.
How much should a loyalty reward cost?
How to cost a reward properly using cost of goods rather than menu price, what percentage of customer spend is sensible, and the rewards that look generous while costing very little.