Loyalty Program Not Working? How to Find and Fix the Problem
Feb 10, 2026
You set up a loyalty programme expecting more repeat visits, stronger customer relationships, and a noticeable lift in revenue. Instead, you've got a handful of sign-ups, a dashboard gathering dust, and the creeping suspicion that the whole thing was a waste of time.
Before you scrap it, take a breath. A loyalty programme that isn't delivering results almost always has a fixable problem — usually one of five or six common issues that trip up small businesses repeatedly. The programme itself isn't broken. Something specific about how it's set up, promoted, or managed is creating a bottleneck.
This guide walks through the most common reasons small business loyalty programmes underperform, how to identify which problem is yours, and exactly what to do about it. If your programme is struggling, the answer is almost certainly somewhere in these pages.
First: Define What "Not Working" Actually Means
"My loyalty programme isn't working" can mean very different things, and each points to a different root cause.
Problem A: Nobody's signing up. You have the programme, but customers aren't joining. This is a promotion and friction problem.
Problem B: People sign up but never come back. You're getting members, but they don't visit more often or spend more. This is a reward design or engagement problem.
Problem C: Customers sign up, engage initially, then go quiet. Early enthusiasm fades and the programme becomes invisible. This is a communication and momentum problem.
Problem D: The numbers look fine, but revenue hasn't changed. Members are active, but you can't see the financial impact. This is a measurement or structural problem.
Before reading further, identify which of these sounds most like your situation. Then focus on the sections that address it directly. Not every fix applies to every problem.
Problem A: Nobody's Signing Up
This is the most common issue, and it's almost always caused by one of two things: friction or invisibility. If you're struggling to diagnose exactly which barrier is keeping customers from joining your loyalty programme, it's worth systematically ruling out each one before making changes.
The sign-up process has too much friction
Every extra step in sign-up reduces your completion rate. If your programme requires customers to download an app, create an account, set a password, and enter their details before they can start earning — most won't bother.
The fix: Strip sign-up down to the absolute minimum. With a wallet-based platform like Perkstar, the customer scans a QR code, enters their name and email, and the loyalty card saves directly to their Apple Wallet or Google Wallet. No app download, no account creation, no password. The entire process takes under 30 seconds — fast enough to complete while paying at the till.
If you're currently using a system that requires an app download, this single change — switching to wallet-based cards — can dramatically increase your sign-up rate. The barrier between "sure, I'll join" and actually joining needs to be almost zero.
Customers don't know the programme exists
This sounds too simple to be the problem, but it's the culprit more often than you'd expect. You set up the programme, maybe mentioned it on social media once, put a small sign somewhere in the shop — and assumed customers would find it.
They didn't. Because customers aren't looking for your loyalty programme. They're thinking about their coffee, their haircut, their lunch. Unless your programme is placed directly in their path and actively offered to them, it stays invisible.
The fix: Two actions that account for the vast majority of sign-ups:
Staff asking at every transaction. "Would you like to join our rewards programme? It takes 20 seconds and you'll earn a stamp today." This single sentence, said consistently, is the highest-converting sign-up method by a wide margin. If your staff aren't asking, your programme isn't being promoted — regardless of what's on your walls or website.
QR code at the point of sale. A visible, well-placed QR code where customers pay. Not in the corner of a noticeboard. Not on a poster behind the door. Beyond these two essentials, there are several other proven ways to promote your loyalty programme that compound sign-ups over time without requiring a marketing budget. Right at the counter, where customers are standing still with their phone already in their hand.
If sign-ups are your problem, solve these two things before trying anything else. They're responsible for 80% or more of enrolments in successful small business programmes.
Problem B: People Sign Up but Don't Come Back More Often
You've got members, but the programme doesn't seem to be changing their behaviour. Visit frequency hasn't increased. Revenue looks the same. The programme exists, but it isn't doing anything.
The reward isn't compelling enough
This is the most common cause. If your reward doesn't genuinely excite the customer, the programme creates no additional motivation to visit.
Signs this is your issue: Low redemption rates. Customers reaching their reward threshold but not bothering to redeem. Or customers never getting close to the threshold because they're not trying to.
The fix: Ask yourself honestly — if you were a customer, would this reward motivate you to visit one extra time this month? If the answer is "probably not," the reward needs to change.
For most small businesses, the reward should be something the customer would normally pay for and genuinely values. A free coffee, a free haircut, a meaningful percentage off a meal. Not a token gesture — something that feels like a genuine thank-you for their loyalty.
The threshold is too high
A loyalty programme with 20 stamps before a reward asks the customer to visit 20 times before seeing any return. For a weekly coffee shop visit, that's nearly five months of waiting. For a monthly salon visit, that's over a year and a half. Most customers lose interest long before they get there.
The fix: Eight to ten stamps is the proven sweet spot for most small businesses. It's achievable enough to feel within reach from the moment the customer joins, but enough visits to build a genuine habit. If your threshold is higher than 10, try reducing it and watch what happens to redemption rates.
Consider adding a milestone reward at the halfway point too. A small bonus — a free add-on, a bonus stamp — at stamp four or five keeps momentum alive and prevents the mid-programme dropout that plagues long-threshold schemes.
With Perkstar, you can adjust your stamp threshold and reward at any time through the dashboard. Test a lower threshold for a month and compare the results.
There's no reminder between visits
A customer joins your programme, earns two stamps, and then... nothing. They go about their life. A week passes, then two, then a month. The programme is technically still there in their wallet, but without a prompt, it fades from consciousness. Without these nudges, even enthusiastic members gradually disengage — and silence is the single biggest reason customers abandon loyalty programmes entirely.
The fix: Use push notifications to stay present between visits. Not aggressively — one to four times per month is the right frequency. A well-timed notification creates the nudge that turns intention into action.
Examples that work:
"You're 3 stamps away from a free [reward] — pop in this week?"
"Double stamps today, [day] only."
"It's been a while — we've saved a bonus stamp for your next visit."
With Perkstar, push notifications are unlimited on every plan and land directly on the customer's lock screen. They have significantly higher open rates than email and cost nothing to send. If you're not using them, you're leaving your most powerful re-engagement tool untouched.
Problem C: Early Enthusiasm Fades
Customers joined with energy, earned a few stamps, maybe even redeemed their first reward — and then gradually stopped engaging. The programme felt exciting initially but became background noise. For members who've already gone quiet, a targeted approach to re-engaging lapsed loyalty programme members can recover a significant portion of them before they drift away permanently.
You're not communicating enough (or at all)
The most common version of this problem: the business owner set up the programme, promoted it at launch, and then stopped actively managing it. No push notifications, no promotions, no seasonal updates. The programme went quiet, and so did the members.
A loyalty programme isn't a set-and-forget system. It needs ongoing communication — not heavy maintenance, but regular touchpoints that keep it alive in customers' minds.
The fix: Set up a basic communication rhythm and stick to it.
Weekly: One push notification with a clear, simple message (a promotion, a reminder, a thank-you).
Monthly: Review your analytics. Check active member rates, redemption patterns, and sign-up trends. If something's dropping, investigate.
Quarterly: Refresh something about the programme. A new reward, a seasonal promotion, a referral campaign. Small changes keep the programme feeling current rather than stale.
Perkstar's automations can handle some of this for you. Birthday rewards, lapsed-customer reminders, and post-visit messages can all be configured once and run automatically. But the manual touchpoints — the weekly notification, the seasonal refresh — are what keep the human feel alive.
The programme has no variety or progression
A loyalty programme that does exactly the same thing month after month eventually feels routine. The customer knows the deal, they know the reward, and the novelty has worn off.
The fix: Introduce periodic variation without overcomplicating the core structure. The underlying programme stays simple (earn stamps, get a reward), but you layer in occasional surprises:
A "double stamp day" once a month on your quietest trading day
A seasonal reward rotation (different reward in summer vs. winter)
A referral campaign for a limited period with bonus rewards for both parties
A surprise push notification to your most active members: "You've been one of our top These small touches don't just prevent fatigue — they're also what makes your loyalty programme stand out from competitors who are running the same static stamp card month after month. customers this month — here's a bonus stamp"
These variations take minutes to set up in Perkstar and create moments of delight that prevent the programme from becoming predictable.
Problem D: Numbers Look Fine, but Revenue Hasn't Changed
This is the trickiest situation because the programme appears healthy on the surface. Members are joining, stamps are being collected, rewards are being redeemed — but the business isn't making more money.
You're rewarding behaviour that would have happened anyway
If your most frequent customers — the ones who were coming three times a week before the programme existed — are the only ones redeeming rewards, the programme is giving away margin without generating incremental revenue.
The fix: Look at whether your programme is attracting new repeat visitors or just rewarding existing habits. Perkstar's analytics can show you visit frequency trends over time. If the majority of your active members were already regulars, you need to focus promotion efforts on less frequent customers — the ones who visit once a month but could visit twice with the right incentive.
Segment your members by visit frequency and send targeted push notifications to your infrequent visitors specifically: "We haven't seen you in a while — here's a bonus stamp to welcome you back. If your redemption data shows that only your highest-frequency customers are claiming rewards, it's worth looking at specific tactics to improve your loyalty programme redemption rate across all customer segments, not just the ones who were already loyal." This shifts the programme's impact toward incremental visits rather than subsidising existing ones.
You're not measuring the right things
If you're judging the programme purely by total sign-ups, you might miss the metrics that actually connect to revenue.
The fix: Focus on three numbers:
Visit frequency of members vs. non-members. Are loyalty members visiting more often? This is the core indicator of whether the programme is driving behaviour change.
Active member rate. What percentage of your total members have transacted in the last 30 days? If this is low, you have an engagement problem to solve.
Redemption rate. What percentage of earned rewards are actually being redeemed? Too low means the reward isn't motivating. Too high might mean the threshold is too easy (though this is rare for small businesses). If you're not sure which numbers actually matter for your type of business, a clear breakdown of customer loyalty metrics for small businesses can help you focus on what drives revenue rather than what looks good on a dashboard.
Perkstar's dashboard tracks all three. Check them monthly and use the trends to guide your adjustments.
Real-World Diagnostic: A 5-Minute Audit
If you want to quickly pinpoint what's wrong with your programme, run through this checklist:
Sign-up rate below expectations? → Is staff asking at every transaction? Is there a visible QR code at the till? Does sign-up take under 30 seconds?
Members aren't reaching their reward? → Is the threshold 10 stamps or fewer? Is there a milestone reward at the halfway point? Are you sending push notification reminders?
Redemption rate is low? → Does the reward genuinely excite customers? Would you be motivated by it? Is redemption effortless?
Active member rate is declining? → When was your last push notification? Have you refreshed the programme in the last three months? Are you using automated lapsed-customer reminders?
Revenue hasn't changed? → Are you targeting infrequent visitors specifically? Are you measuring visit frequency, not just sign-ups?
For each "no" answer, you've found something to fix. Start with the first one and work down the list.
Getting Started (Or Starting Over)
If your current loyalty programme isn't delivering, you have two options: fix what's broken using the diagnostics above, or start fresh with a platform that removes the most common friction points from day one.
Perkstar is designed to eliminate the issues that cause most small business programmes to underperform — wallet-based cards with no app download (solving the sign-up friction problem), unlimited push notifications on every plan (solving the communication gap), built-in referral programmes and Google Review Rewards (solving the promotion problem), and analytics that show you exactly what's working and what isn't.
Plans start at £15 per month with a free 14-day trial and no credit card required.
