Bonus system for the store

What is a loyalty program?

An in-store loyalty program is a loyalty program that allows customers to receive bonuses or rewards for purchases in a store. Customers accumulate bonus points, which can then be used for discounts on future purchases or other privileges.

For example, a bonus program can give a customer one bonus point for every UAH 10 spent on purchases. When a customer accumulates a sufficient number of bonus points, he or she can use them to receive a discount on the next purchase, a free product, or other privilege.

The bonus program is useful both for customers who receive additional benefits and for the store, which stimulates repeat purchases and attracts new customers.

Why are bonuses more profitable for a store than discounts?

When you give a discount, you actually give the customer a small amount of cash, which they will then spend elsewhere.

Of course, customers love visible savings in the form of clear discounts. But:

• discounts are not always appreciated because of their small percentage
• they reduce the store's revenue,
• stores that introduced discount cards a long time ago will sooner or later face a situation where the discount has already reached its maximum and it is unprofitable to increase it.

A bonus is a discount deferred in time.

Bonuses are good because they exclude fraudulent salespeople with discounts, which often happens in stores that offer discounts without accounting. It is worth advertising that the store has a cumulative bonus system. Customers are careful about using bonuses.

The advantage of bonuses is that they will be spent in your store to purchase your goods. In addition, customers' bonus "money" is accumulated in the turnover of your store. After all, you can only spend the bonuses with the next purchase.
It will take time from the moment the bonus is credited to the moment it is used. And all this time, you have these funds at your disposal.

How does the store accrue bonuses?

Bonuses are stored on the customer's discount or bonus card. All conditions for accrual and settlement of bonuses are configured by the store owner in the accounting program.
The bonus amount is usually determined as a percentage of the purchase amount. It can be fixed and not depend on the amount of the receipt, or it can be cumulative - by analogy with cumulative discounts.

For example: when purchasing goods worth UAH 500, the buyer receives a 2% bonus (i.e., UAH 10). With an increase in the amount of purchases, the bonus can grow (from UAH 2000 - 3% and so on).

You can organize bonus programs of different levels in your store and print different cards for them - "Silver", "Gold", "VIP-bonus", etc., which differ in the conditions for accruing and using bonuses.

How do customers spend their bonuses?

After scanning the customer's discount card, the program shows how many bonuses the customer has accumulated.
When paying for the purchase, the bonus points can be used in full or in part.
The seller deducts the required number of bonuses.
The fact of payment for bonuses is reflected in the sales receipt or cash register receipt for the buyer, and in the sales report for the store owner.

If for some reason the goods purchased with the bonus points are returned, the bonus points are credited back to the customer's card.

What is the most effective scheme of bonus accrual?

We recommend setting a period during which the bonus will be credited. It is advisable to set this period at least 14 days to make sure that the goods will not be returned.

Bonuses on the card can "burn out" with the passage of the specified time, or they can be without an expiration date. Bonuses can be used to pay for any product, or they can be used only if you buy at least one item for cash.

All these nuances work to ensure that the customer is interested in making purchases in your store as often as possible.

Bonuses as a tool for upselling

Repeat sales and upsells are a way to increase your store's profit. The buyer is already familiar with your store and assortment, has left his contacts, and already has a bonus.
It remains to advertise what is useful for the customer and remind them that it can be bought with bonuses. Add a deadline to your message: "Your bonuses will expire in a week" and a hype: "Goods available for bonuses are in limited quantities."

Upselling works well to speed up turnover - you should set up the terms of the bonus system so that bonus payments are possible only when purchasing something for money. Such a scheme can be implemented in stores where the profit is not ensured by a large margin, but by an active turnover.

Word of mouth is also an effective tool. The holder of a bonus card is interested in passing it on to his or her friends to collect points.

The bonus system provides many reasons to communicate with customers: to inform them about the number of points accumulated, the term of their use, and the goods that can be purchased with bonuses.

Refer a friend and get a bonus

The two-tier bonus system is based on this principle. Its essence is to motivate the cardholder to recommend the store to friends on mutually beneficial terms: the friend gets a discount, and the cardholder gets a bonus for the friend's purchases. The size of bonuses can be standard or depend on the amount of the purchase.

Social networks allow you to literally reach anyone. Therefore, online stores can easily use this scheme: a discount code can be sent via SMS, email, or direct message.

This scheme will allow you to use one of the most effective methods of communication - viral marketing, which works on mutual interest. Think about who among your regular customers is in contact with people who need a product from your store? These people can give you much more than an advertising banner.

Bonuses as a tool for differentiation from competitors

Bonuses can be used to reward customers:

• during a promotion,
• to give them on their birthday,
• influence the customer's choice by offering more points for a certain purchase.

By analyzing your customer base and data on their purchases and preferences, you can send out the information you need to people, the response to which will be higher than the cost. The CRM option from Torgsoft - distribution by interests - will help you do this.

Technical implementation and organization of the bonus system in the store

The organization and advertising of a loyalty program is the task of the store owner or marketer, and the implementation and analysis of the results is the task of the accounting system.

It is worth considering important points without which the bonus system will not be effective:

• maintaining and analyzing the customer base,
• identification of customers by barcode on the card,
• the ability to transfer customers from the discount system to the bonus system or combine them,
• analysis of the use of bonuses,
• adjusting points when returning goods,
• the ability to send mass mailings about the status of the customer's bonus account and store promotions.

Before launching the loyalty program, print plastic cards and prepare a store flyer about the terms of participation in the bonus program.

Bonus system in Torgsoft

When starting to keep records in a store, owners often face issues of accounting not only for goods but also for customers. Attracting, retaining customers, and analyzing their purchases become one of the priority tasks in store management. For this purpose, the Torgsoft program has developed various discount systems - a system for accumulating bonuses, cumulative discounts, promotions and birthday discounts, purchases with gift certificates, and others. They can be combined and combined.

Almost every store has the ability to give customers the opportunity to collect bonuses. You can switch customers who already have discount cards from cumulative discounts to bonuses. Or you can combine the two - offer both discounts and bonuses on the same discount card.

The bonus system is available by default in the Torgsoft Ultra or Terminal programs.

The bonus system in the Torgsoft program is organized in such a way that it allows customers to "earn" points when making purchases, accumulate them on the card, and then pay with them for goods - goods from your store.

Note to shops that use terminals for payment by bank cards: sometimes the bank offers sellers to participate in a bonus program, the essence of which is that when paying with a card, the buyer has a discount, the amount of the discount is accumulated on the seller's bonus account, and then the bank returns this money to you. Think about whether this is beneficial for you. Or is it better to create your own bonus system in the store?

What are the terms of the store's bonus program to write for customers?

The terms and conditions of the store's bonus program should be clear and precise for customers so that they know what bonuses they can get, how to accumulate bonuses, and how to use them. Here are some recommendations on what you can include in the terms of your store's bonus program:

• Description of the bonus accrual system: it is necessary to clearly describe how many bonuses the customer receives for each purchase, what goods or services can be included in the program.
• Terms of use of bonuses: it is necessary to specify how the customer can use their bonuses, for example, whether they can be exchanged for discounts, free goods, gifts, etc.
• Terms of bonus retention: you should specify how long the bonuses remain valid and whether there are any restrictions on the number of bonuses that can be accumulated.
• Rules for terminating the bonus program: specify how the program will be terminated and how it will affect the availability of bonuses for customers.
• Terms of participation: you should specify how a client can register for the program and whether there are any restrictions on the number of participants.

These terms and conditions will help customers understand how the bonus program works and how they can use their bonuses.

It is advisable to write down the terms and conditions on a flyer, which you will use to advertise your promotion and familiarize customers with its terms (such flyers are given to customers along with a bonus card), and on the website of your online store.

We suggest using a ready-made conditional store template that will allow you to create a discount program for different occasions. Sample text:

Loyalty program for the store "Shoe store"

To become a member of the bonus program and receive a card for accumulating bonuses, you need to make a purchase of UAH 500 or more in the "Shoe Store" chain of stores and fill out a customer questionnaire.

The bonus is 5% of the amount of purchases of goods from the new collection. You can use the bonus from the last purchase 15 days after it was made. Bonuses do not apply to promotional items. Bonuses are valid for 12 months from the date of bonus accrual.

The card is valid until 12/31/2025. If no goods have been purchased with the card during the year, it will be canceled.

The store reserves the right to unilaterally change the terms and conditions of the bonus program.

Accumulated bonuses are not issued in cash, but can only be used to pay for goods in the Shoe Store stores.

In case of returning goods paid for with bonuses, the cardholder will be refunded the purchase price. The used bonuses are restored to the card in 15 days. If the purchase is partially returned, the used bonuses are restored in proportion to the amount of the return.

You can get information about the number of accumulated bonuses from the seller in the stores of the "Shoe store" network. List of stores participating in the program: ....

We remind you that all the conditions described above can be configured in the Torgsoft program.

Example of bonus systems

There are many different bonus systems that use different approaches and offer different benefits. Here are some examples:

• Starbucks Loyalty Rewards Program - for every $2 spent in a Starbucks store, customers receive 2 bonus points that can be used for free drinks and food.
• Amazon Prime Rewards Program - members of the program receive free shipping, access to exclusive promotions and offers, free access to video and music content, and can earn cashback on purchases.
• Hilton Honors loyalty program - members of the program receive bonus points for every purchase made, which can be used to pay for rooms, room upgrades and other benefits.
• Sephora Beauty Insider loyalty program - for every dollar spent, customers receive bonus points that can be used for cosmetics samples and gifts.
• Bonus program of Billa, Watsons, Eva, WOG, Okko - customers receive bonuses for online purchases. This bonus money can be used to get discounts on future purchases.