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Reaping Rewards: Loyalty Programs for Restaurants

Consumers are smart, and no longer easily swayed by traditional marketing tactics. With the ability to compare choices, prices, and deals in real time, simple discounts are no longer driving consumer behavior. In an industry where margins are low and expenses are high, old-school restaurant marketing no longer cuts the mustard.

But, there’s a new game in town in the food industry. Gamification involves turning an everyday activity into a game,  weaving play-based incentives like points, stamps, badges, and VIP status into non-game environments by rewarding customers for participating.  And just like any other game worth playing, participants earn rewards for completing different activities. 

Customer loyalty programs that incorporate fun, feelings and gratification with customer participation is what “gamification” is all about. 

There is a psychological phenomenon called “loss aversion” that suggests that avoiding loss is actually more motivating to consumers than experiencing gain. In other words, a person would rather not lose a dollar, than find one on the sidewalk. This aversion to loss plays an essential role in restaurant gamification because users who get rewarded do not want to lose their rewards, and they’ll do whatever it takes to retain these rewards.

Tapping into this psychological aversion for loss in the restaurant game takes place in loyalty programs that include levels, stamps, point systems, badges, and more. All of these features inside an interactive loyalty program work together to create a positive experience for users that encourages them to engage and come back to pick up where they left off. A gamified loyalty platform is the perfect fit for restaurants due to the frequency of brand engagement, both online and offline.

Loyalty gamification works by convincing customers to do what you want such as buying more of a specified menu item, visiting on certain days, or ordering a set number of times from your online delivery menu,  while rewarding them with something that makes them happy like free menu items, a generous discount, or complementary delivery.  It’s basically saying: “if you do this, then you’ll get that.”

What Is a Loyalty Program?

Loyalty programs, which reward brand loyalty and incentivize customers to frequent a business, provide discounts, freebies, and benefits to customers who regularly choose a business.

Restaurant Loyalty Program Benefits

  • Increases Revenue - Loyalty members typically purchase more often and at higher price points than non-loyalty members, increasing revenue.

  • Earns Repeat Business - Consumers will continue doing business with a brand that offers a loyalty or rewards program.  

  • Prompts Referrals - Customers  are more likely to recommend restaurants with loyalty programs.  

  • Reaches a Younger Audience - Gen Z is more likely to dine at a restaurant with a loyalty program. 

9 Ways to Play on Consumer Behavior

#1) Accumulate Points For Free Menu Items

The simplest example of loyalty gamification is a stamp or a digital rewards card. When your customer buys a drink, they get a stamp or point, for example. This repeats until they reach the goal ("make 10 purchases and win a reward.")  

A loyalty card program that rewards customers with points for purchasing a certain item promotes repeat business because customers are driven to continue coming back to gain more points. 

A well-designed loyalty points program that encourages customers to buy high, and sell low, so to speak, by motivating them to purchase items from your menu that yield higher profit margins, and reward them with lower cost items, raises the stakes even more. An example would be, “Purchase 10 specialty coffee drinks and get one small coffee.”  

Just knowing that they’ll be rewarded makes them feel acknowledged and instantly gratified. Even if it takes 10 visits to get the free reward, every stamp makes them feel like they’re getting something, so they’ll likely come back.

We humans hate to wait and desire instant gratification – (the desire to experience pleasure or fulfillment without delay or deferment) – so giving that one stamp fulfills that desire. This feeling of instantaneous gratification will make customers feel good, and  they’ll associate this good feeling every time they think of your restaurant.

So what happens next? The hope is, they’ll want to continue experiencing this exhilarating feeling and they’ll continue coming back to your restaurant to feel good.  And presto, magico, they’ve become converted into loyal customers.  


  • For every large pizza, get one stamp. 10 stamps = one free small pizza

  • For every specialty coffee purchase, get one stamp. 10 stamps = one free regular coffee.

  • For each visit (minimum order of $25), get one stamp. 10 stamps = one free dessert item. 

#2)  Tiered Rewards 

Take your gamification rewards to the next level by creating a point system for your restaurant loyalty program.  This “game” plays on the desire to avoid the pain of spending money. 

This type of system can involve monetary rewards or discount tiers. 

Monetary rewards: One type of tiered rewards program rewards points with dollars. Once a guest earns 100 points, for example, they can redeem $10 off their next meal.

Discount rewards: Alternatively, you could associate tier levels with an added discount. 


  • For every $10 spent, get one stamp. After 10 stamps, receive a 25% discount on your next order. 

  • For every $10 spent, get one stamp. After 20 stamps, receive a 50% discount on your next order. 

  • For every $10 spent online, get one point. After 10 points, receive $10 off your next meal.

  • For every $1 spent online, get one point. After 100 points, receive $10 off your next meal.

#3: Combine with Urgency

To spice things up and motivate customers to take action fast, adding a sense of urgency to your gamification plan by adding expiration dates or deadlines, ups the stakes.


  • Buy 10 pizzas between 11/25 and 12/30, and get a free pizza on New Year’s Eve.

  • Spend $150 before 12/31/2022 and get 25% off your first purchase in 2023.

#4: Increase Table Reservations

If your goal is to increase reservations, reward customers every time they make one. 


  • For every reservation for 2 or more guests, get one stamp. After 10 stamps, get one free dessert for every guest.

  • For each reservation of 4 or more after 5pm, get one stamp. After 10 stamps, get 25% off your next meal.

  • For each reservation of 2 or more or Monday and Tuesdays, get one stamp. After 10 stamps, get 25% off your next meal.

#5) Birthday Loyalty Program

Who doesn’t love a birthday present? Another way  to encourage customer engagement  and collect valuable data at the same time is to offer rewards to customers on special days like birthdays and anniversaries. Not only will this increase customer loyalty, but it’s an all-around feel good incentive that encourages customers to eat at your restaurant on special occasions. 

Offer free items or delivery to existing customers who are already enrolled in your loyalty program and remind them as the big day arrives with well-timed, personalized emails. This will plant the seed in their minds and encourage them to celebrate their big day with their favorite menu items from your restaurant. 

Offer birthday rewards to first time users to encourage enrollment and increase likelihood of their return to your restaurant or website on their birthday.  


  • Free delivery on customer’s birthday

  • Free dessert on customer’s birthday.

  • Buy one, get second menu item free on birthday 

#6) Social Media Rewards

Just like we consume food to feed our bodies, our ego is fueled by pride.  A great way to receive free advertising and encourage patrons to engage with your brand on social media platforms, reward customers loyalty points for posting photos of your food or business to their social media accounts.  By having customers “brag” about your food,  you’ll increase your restaurant’s brand presence and online visibility.

#7) Referral Rewards

 Allow customers to win points, perks, and rewards for referring a customer when the person they referred makes a purchase. CRM software can help you track customer referrals. To prevent profit loss, keep referral points  programs to “first generation,” such that when customer “A” refers customer “B,” customer “A” gets a point. When customer “B” then refers customer “C,” only customer “B” gets a point. Customer A does not. 

#8) Extended Happy Hour Rewards

Offer extended happy hour times to  loyalty club members. You can also include more items on the happy hour menu for rewards club members to entice customers to engage with your loyalty club.

#9) Merchandise/Swag Rewards

Offer patrons merch for participating in your rewards program. Not only will this boost their affection for your brand, but it is also free advertising.  

Loyalty Program Tips

  • Make your loyalty program easily accessible from a smartphone.  

  • Let customers earn gifts and swag.

  • Offer extended redemption periods.

  • Provide early access to sales.

  • Don’t ask for personal information.

  • Eliminate physical  cards.

  • Don’t ask customers to download an app to participate in your loyalty program.  


Take Away

Gamification taps into the core human drive to feel good that motivates certain behaviors.  Upping your restaurant’s marketing game by adding strategic loyalty program is a winning play.  

By Eileen Strauss


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