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The Do’s and Don’ts of Creating a Loyalty Program That Actually Works
7/3/2026
By now, the case for restaurant loyalty programs is pretty clear.
Customers love them. According to Intouch Insight, nearly two-thirds (65%) of consumers say they’re more likely to choose a restaurant over a competitor because it offers a loyalty program.1 At a time when value is top of mind for nearly every consumer, the case for loyalty programs has only gotten stronger.
Operators love them, too, since loyal customers visit more often and spend more on average. “When customers feel their interactions with a brand are recognized and rewarded, it naturally leads to more visits and higher spending,” says the National Restaurant Association.
Overall, a well-designed loyalty program is an important tool that delivers for both consumers and operators. It gives your customer an ongoing reason to feel like they’re getting a good value, while also giving operators a way to inspire both new and repeat traffic. View why loyalty programs can attract value-conscious customers here.
So if loyalty programs are such a slam dunk, why do so many of them fall short?
In the end, it often comes down to the details and execution of the program itself. Not every loyalty program is created the same. The difference between a program that drives traffic and showcases real value and one that just becomes another hurdle for customers to jump through is stark. A well-designed loyalty platform hinges on how your staff talks about the program, how easy it is to join, how clear the rewards path is, and how thoughtfully you stay in touch with members and keep them engaged.
Creating a loyalty program that actually retains customers means going beyond a punch card for a free entrée. That’s so 1995.
Instead, today’s customers expect a program that’s frictionless, integrated across mobile apps, and clearly rewards their time. The bar for loyalty programs continues to go up. But there is a clear playbook you can follow to ensure success.
Here are some do’s and don’ts worth keeping in mind as you craft your own program:
The Do’s
Get your staff on board. No single element is more important to your loyalty program than your team. Nearly 30% of loyalty program members say they signed up specifically because an employee told them about it.1 On the other hand, 46% of non-members say the reason they haven’t joined is that nobody told them about it.1
That’s a huge group of customers who could be a part of your program, yet they aren’t being included simply because a team member never brought it up.
A good loyalty program should be built into your training process. Can every manager, host, server, and cashier describe the benefits in a single sentence? Have you sold the benefits to your staff so they believe in the program themselves? One clear way to boost sign-ups is by incentivizing your team. Offer a small bonus or prize for every new member they sign up for the program.
Make the program as clear as possible. There are far too many convoluted loyalty programs that customers find difficult to navigate. Making it even more difficult, these programs are often changing all the time, switching up tiers or reconfiguring redemption requirements. If a guest can’t understand how a program works in a few sentences, they won’t sign up. “Earn 1 point per dollar,” for instance, is about as easy as it gets. The fewer steps that a guest has to understand, the better.
Getting that simple message across also requires very clear signage. Over two-thirds, or 64%, of consumers say they learned about a loyalty program through restaurant signage.1 Table tents, menu callouts, register stickers, and even bathroom signage can all help get the message across. A QR code on the tabletop with a clear reward for signing up can be an easy way to entice new members.
Make rewards attainable. Nothing makes a loyalty program feel less valuable than rewards that feel out of reach or too difficult to obtain. When designing your program, tier your offerings so casual visitors hit a small reward early. That first taste of free rewards can turn a one-time signup into a regular customer. From there, you can layer on bigger rewards and exclusive perks to celebrate your heaviest users. Early access to LTOs, special secret menu items, members-only events, and even priority seating can deliver the value that customers want.
The math should always work for you, too. As restaurant margins continue to get tighter, balancing rewards that feel generous to guests but are smart for the bottom line is key. Early access to new menu items or LTOs doesn’t cost you anything, but it can feel extra special to your most loyal customers.
Make every step as easy as possible. From the initial sign-up to the moment of redemption, friction is the enemy. Sign-ups should be quick and easy, ideally requiring nothing more than a name and phone number or email to get a customer signed up initially. You can ask them to fill out additional information (like their birthday to earn birthday rewards) later.
Earning points should happen automatically and across every interaction, whether it’s in person, on your website, or on the app. Consistency is key. If a customer earns points through the app, it should still be easy to redeem them in store (which, again, requires team member training).
Tech makes this easier than ever. Mobile apps tally points immediately at checkout, rewards apply with a single tap or automatically, etc.
These recommendations may sound obvious, but 1 in 5 loyalty program members says they have had trouble redeeming a reward, with over half (51%) forgetting they had earned it, 40% unsure of how to collect it, and 23% saying they were uncomfortable asking a server.1 All of those issues are easily fixable with push notifications announcing a reward or automatic reward redemption, clear instructions on receipts and signage, and clear staff training.
The Don'ts
Don’t charge for participation. While paid memberships may work for some very large retail brands, for most restaurants, asking for a fee to join the program is a non-starter. It’s an immediate friction point.
It also sends the wrong message, that you’re more interested in collecting fees and making a buck off of your guest than earning their loyalty. A well-designed program should pay for itself through new customers and returning traffic. It needs to prove its value to the customer over time and usage.
Don’t force an app download. To be sure, mobile apps are an excellent way to integrate loyalty rewards. They offer push notifications, mobile ordering, personalized offers, tier tracking, etc. But they shouldn’t be the only way to participate. Not everyone is tech-fluent or has access to a mobile phone.
Many consumers are also dealing with app overload and tech fatigue. According to Menu Matters, 31% of consumers today say they don’t want to download any more restaurant apps.3
For those who are pulling back from tech or are less tech fluent, are you offering multiple paths to your loyalty program? Loyalty cards, phone number tracking, email rewards, and web solutions can give customers many options.
And if you do offer an app, ensure that it’s truly useful and worthwhile, not just another app a customer downloaded to get a deal or coupon and then quickly forgets about.
Don’t forget to check in. In some respects, getting a customer to sign up for your loyalty program is the easy part. Offer them a discount and they’ll probably sign up. But keeping them engaged is where many programs fail. It becomes just another app on their phone, taking up space and easily deleted on their next system cleanup.
Luckily, there are plenty of useful reasons to reach out to members. Give them monthly updates on their points balance, notify them when they have achieved a reward, give them a heads up when points are about to expire, let them know about exclusives just for members, etc.
You don’t want to bombard or annoy them with daily messages. That’s a clear path to being muted or, even worse, unsubscribing entirely. Messages should feel useful, not pushy. Start with a monthly check-in that shows a clear value. In other words, continue the hospitality even when customers aren’t in your foodservice location.
A great loyalty program goes far beyond just the rewards. It encompasses every small choice: how your staff talks about it, how easy it is to join, how clear the rules are, how thoughtfully you stay in touch. When you do it right, you’ve built a direct pathway to creating more engaged customers, a built-in marketing channel, and a steady source of repeat traffic.
1 Customers Love Loyalty Program – So Why Don’t They Use Them? FSR Magazine
2 Innovations in Restaurant Loyalty Programs, National Restaurant Association, October 2024
3 2026 Consumer Needs Report, Menu Matters, January 2026
