What is a Loyalty Card?

Many loyalty programs utilize a so-called "Loyalty card".
So what is a loyalty card?

A loyalty card is a plastic card with a magnetic strip at the back, or a small chip at the front of the card. The magnetic strip or chip contains information that is used to identify the buyer at every transaction. This way, the buyer is linked to the transaction at the swipe of his card.

Now every transaction of a buyer is known, the company that issued the card can offer rewards for repeated business: for instance, points can be rewarded for every $10 spent. When the buyer has collected enough points, these can be traded in for real gifts.

So the loyalty card is used to track repeat transactions of a card holder, so the card issuer can reward him or her for the repeat business.

One can wonder, however, how "loyal" a customer is if he must be "bribed" for repeat business...

 

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