Choosing Loyalty Rewards: What to Offer and What It Should Cost in Points

Most loyalty programs stall on two questions before they ever launch: what should I give, and what should it cost. The two are connected, and both have sensible answers that nobody says out loud often enough.

This article walks through the decision: how to set the value of a point, how many rewards to start with, when to tie them to tiers, and which limits you will need so that redemption never hurts.

A reward is not a discount

The first distinction matters most. A discount cuts revenue immediately, on every guest. A reward costs you money only when someone actually redeems it, and only for people who already came back.

So always cost a reward at what it costs you, not at its menu price. A free coffee is 1,200 forints on the menu; the ingredients are a fraction of that. That gap is what makes a loyalty program economical, and we covered the full arithmetic in the article on calculating loyalty program ROI.

Start with the value of a point

Before you invent a single reward, decide how much spend earns one point. In Revino this is one number: how many forints it takes to earn a point.

Pick a round ratio. If 100 forints is one point, your guest can do the maths in their head, and that matters more than it sounds. Someone who does not understand how their points add up will not collect them.

From there, pricing a reward is multiplication, not intuition:

• Reward cost in points × currency per point = the spend it takes to earn it.
• At 100 forints per point, a 300-point reward means 30,000 forints of spend.
• If your average ticket is 1,500 forints, that is roughly twenty visits. Too many.

That last step is the important one. Always convert back into visits. Your guest does not think in points, they think in how many more times they have to come in.

The first reward should be close

The most common mistake is putting the first reward too far away. Someone whose first win takes fifteen visits will have forgotten they are a member long before they get there.

Aim for a first reward that is reachable in three to five visits. It can be small: a syrup in the coffee, an extra topping, something that goes alongside the order. Its job is not to be generous, it is to prove the system works.

After that comes the ladder. Three rewards are plenty to launch with:

• Small, three to five visits, to establish trust.
• Medium, roughly double that, which will be your most redeemed reward.
• Large, genuinely valuable, the one some guests save toward for months.

If you are running the stamp card mode instead, the same logic applies in stamps. We wrote about that in the article on digital stamp cards.

What belongs behind a tier

Not every reward has to be available to everyone. Each reward can carry a minimum tier, and only guests at or above it will see it.

That is useful when you have something you do not want to spread thin: an exclusive tasting, a higher-value gift, a seasonal special. The article on VIP tiers covers how the four levels are built and what makes a higher one worth reaching.

One tip: a tier-gated reward should still be visible to the people below it, because that is the reason to climb. Nobody works toward something they cannot see.

The limits you will need

Three settings keep your rewards from running away from you.

• A total cap. You can set how many times a reward may be redeemed in total. That is what makes a limited run possible: there are twenty of them, and then they are gone. Scarcity motivates on its own.
• A per-customer cap. How often one guest may take the same reward is a separate question. The default is once, which is right for most higher-value rewards. For small, repeatable rewards it is worth raising or removing, otherwise the guest gets one nice moment and never another.
• A time-limited offer. A reward can be given a lifetime, after which it disappears from the list by itself. This is your flash-offer tool: a reward posted for one weekend creates urgency without you having to remember to take it down.

Watch what actually gets redeemed

After a few weeks your analytics show how many times each reward was taken. That list usually holds a surprise: one reward nobody wants, and one everybody comes for.

What to do about it:

• Remove the dead reward. Do not leave it there as decoration. Long lists cause choice paralysis.
• Do not underprice the favourite. If every redemption lands on one reward, it is probably too cheap in points.
• Look at the redemption rate too. If only a fraction of issued points ever gets redeemed, the program is not costing you much, but it is not building much either. That usually means the reward is too far away.

The most common mistakes

• An awkward point ratio. 137 forints per point is mathematically identical and useless in conversation.
• Too many rewards at launch. Three is enough. Adding is easy, taking away is awkward.
• Costing rewards at menu price. Your ROI will always look worse than it is.
• A high-value reward with no per-customer cap. This is the one missing setting that visibly costs money.
• A reward list nobody ever reviews. Anything that has not moved in six months is not a reward, it is clutter.

Summary

Choosing and pricing rewards is one connected decision. Start with the value of a point, keep the ratio round, and always convert back into visits. Put the first reward close, keep the ladder short, and tie the valuable rewards to a tier and a limit.

After that, your only job is to look at the redemption numbers every few weeks. A good reward list is not the one you designed perfectly, it is the one you keep trimming based on what your guests actually choose.

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Revino lets you set a point cost, a minimum tier, and both total and per-customer redemption caps on every reward, and shows redemptions per reward in your analytics. Try it free with a 7-day trial!