Punch cards in restaurants were a simple solution to being able to track the visits of your frequent customers. It was easy to make and cut the cards out, then distribute to your customers. However, punch cards get lost, destroyed, or sometimes cashiers forget to punch a hole for a visit, thus causing frustration from the customer.

I'm going to be honest with you and say the future is not punch cards. I will, however, be fair and provide pros to using punch cards in the restaurant business, and give you some tips on how to use them to your advantage.

1. They’re Simple to Launch

Think about it. All you have to do is print out a few sheets and cut!

You don't need to make any fancy announcements for the release of your punchcards. Just have your cashiers hand them to customers if they don't already have one.

You'll need to decide what purchases earn a punch. Figure out how many purchases or services customers need to earn the discount or free item. This is easiest for businesses with limited item selections.  For example, a coffee shop could offer a free coffee for every X amount of purchases.

2. They’re Cheap to Produce

With punch cards, you don't have to worry about spending a ton of money on advertising and designs. Your biggest cost is probably the amount it'll take to go to Kinkos and get them printed on card stock.

A good punch card will include your logo and business name, plus a grid of “punch” spots. So, your costs are just the time involved to design the card, the paper, the printer ink, and either a one-hole punch or stamp for your staff to use.

3. Punch Card Loyalty Programs Are Easy to Learn

Punch cards don't require any training or installations. They don't come with technical difficulties and the only thing they require is the customer keeps track of them and the cashier remembers to punch a hole. Make sure that your employees are aware of what qualifies for one punch.

You might be wondering what is so bad about punch cards if I gave you three really good pros. Unfortunately, with the way we are moving with technology, they're just not functional for larger scale restaurants. Customers don't want to worry about bringing their punch card whenever they visit your store.

Think about it, if every restaurant or store had punch cards, that's a lot of punch cards that customers need to carry around. Now that most loyalty programs are digital, customers don't even need to bring their phones if they are able to provide a number to the cashier. But let's be realistic, how many people aren't carrying a phone around with them?

However, if you're a local store or restaurant, punch cards are a great place to start. In fact, there's no shame in trying them out and seeing how well your customers respond to them. See if you can gather data about if they're increasing retention and sales.

Something to keep in mind is you want to avoid rapidly changing your loyalty programs. Consider using punch cards for a long period of time, like a few months to a year. This will give you enough data to help you determine if a digital loyalty program will work better.

If you reach this conclusion,  make sure not to go from one program to another. Not only is this harder on your customers, but it's harder for you.

Punch Card Alternatives

Punch cards aren't the only way you can track and reward loyal customers. This is when today's new age of digital loyalty programs come in.

There are so many loyalty programs out there all ranging in costs and features. For smaller-scale companies, consider a free program to see how well your customers respond to them. Most of the time, the free programs are just as good, if not better, than the paid ones.

Some range from having a basic amount of features like simply tracking points. Others are able to give you the option to run promotions and let customers share their points with each other.

Why You Need a Loyalty Program

If you're hesitant to get started with a loyalty program, that's understandable. It seems like there's a lot of information and you want to make sure you make the right decision. However, digital loyalty programs are known for benefiting businesses in ways you probably never imagined.

Consumers are 82% more likely to shop at stores and eat at restaurants who have loyalty programs. This means you're walking away with a higher return on investment (ROI) and a higher customer retention number.

Loyalty programs are also a great way to form a relationship with your customers. They like to be rewarded for spending money at your business, and you're the one giving that to them. Loyalty programs show your customers that they have something to gain by sticking around and spending their money at your business.

Also, loyal customers are less expensive for businesses because they are already customers and don’t require you to spend money on marketing and advertising.

Lastly, loyalty programs provide you with detailed insights into your customers and their purchasing decisions. This helps business owners in so many ways from product decisions, advertising, and budgeting. You'll be able to give customers a personalized experience by getting to know them.

Final Thoughts

Overall, punch cards are not as bad as it might seem. They're a cost-effective way to get a loyalty program for your business. Not only can you get the ball rolling to make customers familiar with the idea, but they help you better understand your customers.

After having punch cards for a while, it'll probably be time to make an upgrade. When you feel ready to do this, research digital loyalty programs that have good reviews and fit the needs of your business.

If you ever have any questions as to what you should be looking for in a loyalty program, don't hesitate to reach out! We'd be happy to help you in any way we can.