How to start a loyalty programme for your small business in South Africa

1. Decide what you want it to do

A loyalty programme is for bringing customers back more often, not for winning them the first time. Ask: how often does a good customer visit today, and what would one extra visit a month be worth? A coffee shop wants weekly regulars to come twice a week. A salon wants clients to book their next cut here instead of trying somewhere new. Keep that goal in mind when you choose the reward.

2. Choose the type of programme

• Stamp card ("buy 9, get the 10th free"). Easy to explain at the till, and customers can see how close they are. Best for repeat purchases at a similar price: coffee, haircuts, car washes, water refills, takeaways.
• Points (a percentage of what you spend). Suits shops with very different basket sizes, where a big spender should earn more. Harder for customers to picture what they've earned.
• Prepaid packages ("10 blow-waves, paid upfront"). Not a reward, but they lock in visits and money upfront. Good for services.

For most small businesses, start with stamps. Research on real stamp cards shows why they work, and how a head start of one or two stamps nearly doubled the number of customers who finished a card.

3. Set a reward you can afford

Work out what the reward costs you, not what it sells for. An example with made-up numbers: a coffee sells for R38 and costs you R10 to make. On "buy 9, get the 10th free", a customer pays 9 × R38 = R342 and you give away R10. That's under 3% of what they spent, for a customer who came back 10 times.

• Pick a reward people actually want, usually your most popular item or service.
• Choose a number of stamps customers can reach in a few months: 8 to 10 for something bought weekly, 5 or 6 for something bought monthly.
• Give 1 or 2 welcome stamps, so nobody starts on zero.
• Add an expiry date for earned rewards, so they get used rather than forgotten.

4. Make it hard to cheat

Paper cards and printed QR codes are easy to copy: a self-inking stamp is cheap, and a photo of a printed code works anywhere. Whatever you use, check that:

• a stamp needs a real visit, for example a code that changes and works once, or staff confirming it;
• you can set a daily limit and a waiting time between stamps;
• you can see who got which stamp, and when, if something looks wrong.

5. Follow POPIA

A loyalty programme collects personal information, so the Protection of Personal Information Act (POPIA) applies. In practice:

• Collect only what you need: a name and a phone number or email address is usually enough. Never record health or other sensitive information in notes.
• Tell customers what you collect and why, in a privacy notice they can read.
• Get separate permission before sending marketing messages, with a box that isn't ticked for them, and keep a record of when they agreed and what they agreed to. Every message needs an easy way to opt out.
• Keep the information secure, and let customers see and delete it.

This is general information, not legal advice. The Information Regulator publishes guidance on POPIA.

6. Choose a tool

There are three broad options in South Africa:

Before you sign up for anything, check: does it work with cash and your card machine? Do customers have to download an app? Can you export your customer list? Is there a contract? What does it cost per month, in Rand, including VAT? Our comparison of loyalty apps in South Africa answers these for the main options, and there's a separate page on the Yoco loyalty programme.

7. Launch it properly

1. Put a poster with a QR code where customers wait or pay.
2. Tell your staff what to say: "Do you have our loyalty card? Scan here, the first stamp's on us."
3. Offer every customer a card for the first few weeks, not only regulars.
4. After 6 to 8 weeks, check how many customers came back and how many rewards were used, then adjust the number of stamps or the reward if needed.