Rewards programs incentivize customers to stick around. In fact, 72% of consumers say loyalty programs make them more likely to spend with their preferred brand, according to a 2026 survey from Deloitte.
Different structures and rewards work for different brands and audiences. When done well, reward programs offer companies a high return on investment (ROI). “Leveraging the loyalty program is something that doesn’t really cost us anything, and it gives people an incentive to come in and spend more money,” Jeff Eyser, founder of comic book store Revenge Of, says on Shopify Masters.
Read on to find out more about how to build a rewards program that’s effective and worthwhile for both you and your customers.
What is a rewards program?
A rewards program, sometimes called a loyalty program, is a tool that brands use to encourage customers to make more purchases in exchange for exclusive rewards. The business offers customers rewards for eligible purchases or actions like leaving reviews, referring friends and family, engaging with social media posts, or joining a paid membership club. Customers can redeem rewards like exclusive discounts, free products and services, and priority customer support.
Types of rewards programs
Here’s a breakdown of the most common types of rewards programs:
Points-based
Customers redeem points for one-time rewards like cash back or gifts. Users earn points on purchases as well as for completing actions like leaving product reviews, referring friends, and tagging businesses in social media posts.
Tiered
Businesses place customers into tiers based on accumulated rewards points or the total amount of money they’ve spent over a given time period. Each tier grants members access to more rewards and exclusive benefits, like discounts or enhanced customer support.
This structure can pay off. Beauty brand Bangn Body, for example, has observed that members of its tiered program have a 68% higher repeat purchase rate than customers who do not participate.
Paid membership
Customers pay a fee for perks and benefits like free shipping, exclusive deals, and early access to product drops. Fees can be monthly, annual, or one-time.
Partners Coffee, for example, charges customers $25 per year to join their membership program. Members receive free shipping, VIP support, sign-up anniversary credits, access to exclusive sales and content, and 10% cashback in the form of in-store credit.
Referral-based
Referral-based rewards programs are also called referral programs. In these programs, customers who refer their friends and family to a business are rewarded when those referrals take an action like making a qualifying purchase. Rewards for referrers include points, discounts, and prepaid gift cards.
Hybrid
Businesses combine elements of different types of rewards programs into a structure that works best for their unique business.
For example, cookware brand Hexclad designed a tiered referral program that generated $450,000 in revenue and a 17% increase in AOV for referred customers within the first 90 days of launching.
Examples of rewards programs
Shopify has reward program apps that help store owners design and manage programs, track user participation, and analyze program performance. Here are some real-life examples of rewards programs, along with the apps brands use to run them:
Princess Polly
Australian clothing brand Princess Polly uses Yotpo to run its tiered rewards program. Customers earn points that qualify them for tiers labeled General Admission, Front Row, VIP, and Backstage Pass.
Customers receive one point for each dollar spent and 50 points every third time they shop with the brand. They also earn points for following Princess Polly on social media, referring friends, and leaving a review. As customers move from one tier to the next by earning more points, they receive perks with higher perceived value, like higher customer service priority and invites to Princess Polly events.
Since implementing this rewards program, Princess Polly has seen a 498% increase in conversion rates and a 112% higher average order value (AOV). It’s also seen a 191% increase in review conversion from loyalty customers.
Moon Juice
Supplement retailer Moon Juice uses Loyalty Lion for its points-based reward program. Customers earn a point for every dollar spent. They also earn birthday rewards, points when they create an account, and when they follow Moon Juice on TikTok or Instagram. Customers redeem their points for cash-value discounts.
Those rewards range from $5 for 125 points to $30 for 750 points. Customers can also earn two times the points for subscriptions and up to 15% off a purchase in exchange for a review.
A case study from Loyalty Lion reports that Moon Juice’s rewards program led to 3.4 times higher customer spend from redeeming program members. Moon Juice Club members also have a four times greater purchase frequency.
Bero
Non-alcoholic beverages company Bero uses Rivo to run its Club Bero membership rewards program. There’s a free membership tier and a paid tier that costs $55 annually.
Unpaid Club Bero members get a $5 credit for signing up and free shipping on orders over $50. Paid members receive a $10 welcome credit, 10% off every purchase, free shipping on all orders, and other benefits, including Q&As with founder Tom Holland and $100 off the Rocco Fridge. Both free and paying members earn credits for both online and in-store purchases, which can be redeemed for discounts on future purchases.
According to data from Rivo, the paid version of Club Bero has led to a 6.7 times higher repeat purchase rate among members as well as a three times higher purchase frequency.
How to create a successful rewards program
- Use a loyalty app
- Create an engaging structure with high-value rewards
- Segment your audiences
- Promote your rewards program
- Analyze your program’s results
Here are some tips for creating a successful rewards program of your own:
1. Use a loyalty app
Rewards program apps let business owners create unique loyalty programs without needing to code or hire a developer. Numerous loyalty apps integrate directly with Shopify stores. Rivo, Yotpo, Loyalty Lion, Bon, and Smile are some of the highest-ranked apps in the Shopify App Store.
Rewards program apps allow you to personalize your rewards program’s structure and customize its user-facing design. They also offer features like omnichannel connectivity, so that customers can earn rewards for both online and in-person transactions.
Additionally, these apps provide data on how different members are participating, as well as key metrics for assessing your program’s results, such as AOV and repeat purchase rates.
2. Create an engaging structure with high-value rewards
Develop a rewards program structure that achieves your desired results while meeting your customers’ needs. As you build your program, choose perks that will provide genuine value to members.
Jeremiah Curvers, founder and CEO of mattress brand Polysleep, rewards customers with $25 to $50 in the form of a Visa gift card or PayPal credit for referrals. On Shopify Masters, Jeremiah says he does this because store credit or points aren’t as motivating to people who’ve just purchased mattresses.
3. Segment your audiences
Use segmentation to manage different customer groups. Create customer segments natively in Shopify to target shoppers to recruit for your rewards program. For example, group together customers with higher repeat purchase rates or larger AOVs, then invite them to join your program.
You can use Shopify Flow to trigger invitation messages to customers after they meet criteria like making a certain number of purchases or spending a certain amount. If you have a tiered program, you can also use Shopify Flow to ensure that members are automatically placed into the appropriate tiers once they meet the necessary requirements.
4. Promote your rewards program
After you’ve created your rewards program, make sure your customers know about it. Use multiple channels to promote your program, ensuring people understand how it works and why they should want to join.
Use social media posts, website banners, emails, and SMS campaigns to promote your program’s launch. Take advantage of in-store visits or post-purchase emails to invite customers to sign up immediately after buying something. Emphasize perks and benefits so customers can easily see the value of becoming members.
Giveaways are another way to encourage sign-ups. Princess Polly, for example, hosted a giveaway for a clothing set on Instagram and required entrants to be rewards club members:
5. Analyze your program’s results
Look at the data you’ve collected since launching your rewards program. Metrics to track include purchase frequency, review collections, conversion rate, average order value, and repeat purchase rate. Compare the numbers pre- and post- launch, and between rewards program members and customers who do not participate in the program.
By examining upticks in spend against the cost of maintaining your program, you can calculate your program’s ROI and see whether it’s hurting or helping your business.
Rewards program FAQ
What is a rewards program?
A rewards program is a customer retention tactic in which businesses offer customersdeals and rewards for carrying out different tasks, like making purchases and referring new customers. Common types of rewardsprograms include points-based systems, tiered structures, and paid-membership clubs.
What are some good rewards programs?
Good rewardsprograms come from Hexclad and Years Beer. Hexclad’s tiered referral program gives customers increasingly expensive free products as they make more referrals. Non-alcoholic brewery Years Beer offersfree shipping, discounts, and a free beer on a member’s birthday for $29 annually. Starbucks’s rewards program also offers free food, free coffee, and more benefits with qualifying purchases.
How do I get users to sign up for my rewards program?
To get users to sign up for your rewards program, offer high-value rewards or personalized offers, and promote your program across multiple marketing channels. Invite customers to join at checkout, post about your rewards on social media, and send invites to join via email and SMS.
