Identification of Loyalty Program Members: Are Cards Still a Thing?

Loyalty identifiers are crucial tools in loyalty program mechanics and in building customer experience. In this article, we look in detail at how the good old-fashioned loyalty cards can now be replaced with other means of identification, and why it makes a difference.

Historically, loyalty program members have used paper or plastic cards to identify themselves during a transaction. For years, such cards were (and still are) a means of connecting a transaction to a member account and rewarding the customer. The reason behind it is that traditional loyalty programs that didn’t involve digital technology were very easy to set up. Before the Covid-19 pandemic, cards also served as physical evidence of being a loyalty program member.

The plastic card is not necessary

However, standard stamps and paper or plastic cards are neither practical nor cost-effective in the long run. Not only do they come with the expense of acquiring them, but they can be easily misplaced or forgotten by customers, resulting in the businesses getting little return on their investment. Additionally, it is difficult or sometimes even impossible to keep track of ROI with these types of loyalty programs. Punch cards, for instance, have the disadvantage of being hard to measure and assess.

The increase in technological capability allows modern loyalty marketers to have more control over these elements. What’s also important, there is a shift in what customers expect from loyalty programs. People are no longer willing to put up with complicated registration processes and rewards systems that bear the risk of being impossible to use because of a forgotten loyalty card. Therefore, any loyalty program, with a physical card or not, must be easy to use and understandable. 

So, what are the alternatives for a traditional card?

Effective ways of member recognition

Today, loyalty technology enables businesses to define any object that is unique as an identifier in the loyalty program. 

This can be an object (physical or not) that is naturally used in carrying out a transaction helping to automate member recognitions throughout the entire process and create a unified, consolidated approach. Take a look at the examples. A co-branded credit card used for every purchase can become an identifier in the program. A driver license number in a car rental program or simply a mobile number can identify a customer too.

In the context of Covid-19, since the emergence of which reduced contact has been preferred, and when payments are more and more often made with a smartphone (without cash, cards or anything else that belongs in a traditional wallet), adding a loyalty card to the digital wallet helps you meet your customers where they actually are – online and mobile. Digital identity is what connects the offline and online worlds of loyalty and provides more convenience in using a membership card.

Online and mobile are not only where your customers are, but also what they appreciate. A 2022 study from The Wise Marketer shows that 71% of customers require loyalty programs to help people live more sustainably or support the environment. Offering a digital equivalent of a traditional plastic card addresses one of eight key conclusions that come from the authors of this research.

Key benefits of digitized loyalty identifiers

Such an approach to member identification allows you to: 

• Reduce the friction in completing transactions
• Provide more convenience to program members
• Drive the perceived value of the program
• Lower the fulfillment costs substantially
• Make your program more environmentally friendly

The emotional factor: a loyalty card may express a member’s status

Does it all mean that plastic cards are headed for extinction? Not exactly. Loyalty programs can still keep their plastic cards to provide something beyond bonuses and rewards for engagement – an emotional value. 

How does it work? Think about credit cards (which, as we stated above, can be easily linked to a loyalty program), especially those widely-recognizable, resembling colors of precious metals such as gold, platinum or palladium. Demand for such cards is not just for their instrumental benefits. Studies show that a substantial part of this demand is explained by the desire to own the prestigious card itself, beyond the tangible benefits and services it comes with.

This is why loyalty cards are still common for many loyalty programs, such as frequent flyer programs (FFPs) run by airways. These cards function as a symbol of status, a conversation starter, and an emotional booster, all of which are strong loyalty drivers.

The bottom line

With cards being an additional element to carry, causing some friction within the experience, and being often difficult to track, it’s only reasonable to digitize loyalty program identifiers and use other convenient objects or pieces of personal data to serve this purpose. 

If you’re looking for loyalty software that allows you to link credit cards to a loyalty program, Comarch Loyalty Management is here for you. The linking process assigns a credit card identifier (not the actual credit card number) to the customer’s account. This means that transactions carried out via a credit card partner can be processed without the customer’s main loyalty identifier. Looking for more details? Visit our page about Comarch Loyalty Management for Travel.