Customer loyalty with loyalty programmes: these are the rules

Stamp cards, online point savings, membership cards and paid membership: all examples of loyalty programmes. In almost all cases, privacy laws and advertising rules apply, but sometimes slightly differently. Violating the rules will earn you a fine from the Dutch Data Protection Authority. Read how to avoid this in this article.

Points of attention per programme

Below is an overview of the most common loyalty programmes. Read for each programme what you should and should not do.

The stamp card

If you want to encourage customers to buy from you more often, but want to minimise the legal risk in doing so, a stamp card offers a solution. For each purchase or a certain amount, customers receive a stamp. When the card is full, they get a free product or an extra discount.

This is how to use a stamp card responsibly:

Do's

• First calculate whether your stamp card is profitable. Suppose you give a free product or discount in exchange for a full punch card. How many products do you need to sell to recoup that amount? 
• Buy an original stamp or have a unique stamp made. With a standard stamp available in any shop, people can recreate your stamp and fill up their card themselves.
• Point out to your staff that they offer the stamp card to customers, so that stamping becomes an automatic action when a sale is made. 
• Adhere to advertising rules. For example, the text on your stamp card should not be misleading. An example of misleading is if you don't mention on the stamp card that your customer still has to pay an extra on trade-in. 

Don'ts

Do not ask for customers' personal details, such as name or email address. If you do, you have to process them according to privacy laws. This will cost you extra time and raise the threshold for your customers to accept the stamp card. 

Saving points online

If you have an online shop, saving points online is a way to retain customers. Your customers create an account and with every purchase they save points. At a certain number of points, they get a free product or discount.

Pay attention to the following if you let your customers save points online:

Do's

• Invest in software for online savings systems. 
• Set clear rules of the game. Tell customers what they get in exchange for points and how many points they have to save for it. State how long the points are valid and how the customer saves them. Also lay down what happens to the points if you go bankrupt. 
• Mention the restrictive conditions in all your communication tools, such as a newsletter and on your website. Restrictive conditions are, for example, the duration of the promotion, a minimum order amount or limited stock. Example: you rent out holiday homes and customers save points for a free stay. If the points only apply to a free stay in the low season, this is the limiting condition. After all, your customer cannot choose from the full offer. If you don't mention the restrictions in your communication, the Dutch Stichting Reclame Code (Advertising Code Committee) could bring out that you do not abide by the advertising rules. This could damage your image. 
• Ask customers for permission to keep personal data when they create a customer account. Even if you work with points savings software, you are responsible for handling your customer's personal data. 
• Store personal data in a safe place. When customers create an account, they share their email address, home address, credit card details and password with you. Protect this customer data by storing it offline, for example. 
• Adhere to advertising rules. The texts in your savings programme must not be misleading. For example: the message 'save points with every purchase' is misleading if customers actually have to spend a minimum of 20 euros per purchase before they receive points. In that case, make it 'Save points with every 20 euros'.

Don'ts

• Do not ask for personal data you do not need. Ask yourself what you are going to do with personal data. If you are not going to send physical mail, a home address is not necessary. 
• Do not use the personal data you collect for other purposes. For example: you cannot use the email address a customer entered when making an online purchase to send your newsletter. 

The membership card

A membership card offers more possibilities than a stamp card or online savings programme. Your customer can use a membership card both online and offline. With a membership card, you can make customers a personal offer or offer an extra product or discount. You can also study their buying behaviour, as the card registers purchases. A membership card does cost you more time than a stamp card or online points saving, because you collect more information that you have to process.

In addition, note the following: 

Do's

• Ask permission (in Dutch) to use your customer's personal data. Even if you only collect the email address for sending a newsletter. Asking permission is a legal requirement. 
• Store your customer's personal data in a safe place. A safe place for personal data is offline, for example. 
• Delete the personal data of customers who cancel their membership.
• Collect data on buying behaviour, such as products a customer buys frequently, only if you have a purpose for doing so. For example, the purpose of tracking what a customer buys could be to send personalised offers.  
• Mention in the rules of the game and communications what data you collect and what you will do with it. 
• Store your customer data in a CRM system. This allows you to see where opportunities lie. 
• Stick to the advertising rules. 
• If you give away a prize, comply with the Games of Chance Act. 

Don'ts

• Do not ask unnecessary questions on the registration form. If customers have to look up and fill in a lot of information, they are more likely to drop out. 
• Do not send emails that customers have not registered for, such as a newsletter. To send a newsletter, you need to ask for permission (in Dutch) first, with an opt-in button in the purchase confirmation, for example. An opt-in button is a subscribe button. 

Paid membership

With a paid membership, customers pay an amount to be a member of your business. In return, they get a year-long discount on every order, for example. The more often they order, the more money they save on their purchases and the sooner they earn back the membership. This way, you increase the amount customers spend at your business every year. You also create loyalty among your customers by giving them discounts throughout the year. 

Do's

• Draw up Guarantee Conditions. Specify how long the membership lasts and what your customer can do with it. Also mention the notice period.  
• Summarise the most important guarantee conditions and mention them in your communication, for instance on your website. If customers do not read the guarantee conditions, they still see at a glance what they agree to when they take out a membership. 
• Store your customer's personal data (in Dutch) in a safe place, e.g. offline on a hard disk. 
• Adhere to advertising rules.

Don'ts

Do not send unsolicited newsletters. Only send a newsletter if you have received permission to do so via an opt-in button, or a subscribe button. In doubt about whether your loyalty programme complies with the rules? Then ask a lawyer for advice.  

Do you collect data on your customers? Read how to handle customer data securely.