Points, tiers or something else? The best reward structure

The right reward structure for your loyalty programme? This is one of the most important choices for your business. It determines not only how much profit you make, but also whether you can grow smoothly. A wrong approach creates unnecessary problems, loose customer data and, worse, you leave sales on the shelf.

Many marketers turn it into a simple discussion: loyalty programme tiers vs points. But that question is too short-sighted. What you really need to ask yourself is: ‘Which approach provides the highest customer lifetime value in my loyalty programme, in a way that I can easily manage?’

This article will help you answer that question. We walk through the most well-known reward structures and show you exactly what the pros and cons are, so you can make the best choice for your webshop.

The 4 reward structures: what works for what?

A good loyalty programme should improve three things. These are the knobs you want to turn for higher Customer Lifetime Value (CLV):

Buy more often (Purchase frequency)
Spend more per order (Average Order Value - AOV)
Keeping customers with you (Customer Retention)

Let's put the four best-known structures against this measurement.

Structure 1: The points programme - for repeat purchases

How it works: The thrill of an instant reward.

The idea is simple: for every euro your customer spends, he saves points. He can redeem those points later for a discount or a product. This works well because your customers see an instant reward. It teaches them to come back for more.

Example 1: Douglas Douglas' ‘Beauty Card’ is a classic example. For every euro you save ‘Beauties’ (points). You can convert these points directly into a €5 discount voucher in the app or online, encouraging customers to make their next purchase at Douglas again to redeem that discount.
Example 2: HEMA With ‘more HEMA’, you save 1 point for every euro. At 125 points, you can claim a voucher for a €2.50 discount. HEMA cleverly uses this to increase purchase frequency on everyday products.

When to choose this?

A points system works perfectly for online shops where customers often buy something for a relatively low amount. Think cosmetics, pet food or coffee. Your main goal is to get customers to make a second purchase faster and get them into a regular buying rhythm.

The pitfalls for your business

The biggest risk? It eats up your profits. Customers start seeing it as a standard discount. Besides, it doesn't directly make them spend more each time. Without a good system, keeping track of all those points also quickly becomes a chaos.

Structure 2: The tier programme - For status and higher order value

How it works: The power of exclusivity and a game.

With a tier programme (think Bronze, Silver, Gold), you give customers a purpose. People like status, recognition and the feeling of progress. The advantages of a tiered loyalty programme lie in the game element: reach the next level and get better perks.

Example 1: De Bijenkorf De Bijenkorf's “Privilege Membership” is a perfect example. Based on your annual spend, you climb from Silver Member to Diamond Member. Each level unlocks better benefits, such as free delivery, exclusive shopping nights and a personal shopper. This motivates customers to spend more to reach that higher, coveted status.
Example 2: H&M As an H&M Member, you start at the first level. By collecting points (through purchases and reviews), you become a ‘Plus Member’. This second, higher level gives you access to free shipping, unique offers and priority in sales. A clear incentive to stay loyal and spend more.

When do you choose this?

This model works super for markets where customers spend more at a time and have a stronger connection to your brand. Think fashion, luxury products or travel. You encourage customers to spend just that little bit more to reach that exclusive, next level. This has an immediate positive effect on your order value and customer value.

The pitfalls for your business

If the threshold to the next level is too high, customers will drop out. And if the rewards are not worth it, the programme loses its power. So you need to know your customers well and set up the levels smartly and profitably.

Structure 3: The VIP Club - Turn customers into real fans

How it works: A sense of belonging.

This is not about points, but about unique experiences for your very best customers. Think first access to new collections, an invitation to an exclusive event or personal style advice. You create an “inner circle” feeling that boosts the emotional connection with your brand.

Example 1: Scotch & Soda Scotch & Soda's “Club Soda” combines points with a VIP feeling. In the higher levels, you not only get more discounts, but also invitations to exclusive pre-sales and member events. This goes beyond transactions and builds a real community.
Example 2: Adidas With “adiClub”, members at the highest level (Level 4) can have a chance to win ‘money can't buy’ experiences, such as tickets to a match in the adidas box or signed products from top athletes. This is pure exclusivity that binds the most loyal fans to the brand.

Is a VIP club something for your webshop?

A VIP Club is perfect if your brand is more than just a product. Do you sell high-end fashion, luxury goods, unique hobby items or products with a strong community factor? Then this model is ideal. You focus on turning your best customers into active fans. They are the ones who not only buy, but also proudly talk about your brand. Their exclusivity creates a “fear of missing out” (FOMO) among other customers, who also want to belong to that special group.

The pitfalls for your business

The benefits must be truly unique. A simple discount is not enough and makes the concept less valuable. If it is too difficult to join, it can feel unattainable. You need to know your top customers inside out to offer them something they won't get anywhere else.

Structure 4: The cashback programme

This is perhaps the most obvious structure: customers get a percentage of their purchase amount back as shopping credit for their next purchase. It is clear, direct and everyone understands it. This makes joining very low-threshold.

Example 1: Holland & Barrett Holland & Barrett's “Pass” is a textbook example. For every euro you spend, you save points. But unlike a pure points system, these points have an immediate, fixed monetary value. 100 points is €1 shopping credit. This is essentially a cashback model: the reward is transparent and immediately redeemable as a discount on the next purchase.
Example 2: Albert Heijn With Albert Heijn's Premium service, you not only get discounts on products, but you also save buying stamps and points twice as fast. The buying stamps are a form of cashback: you pay a small amount extra and get a higher amount back after a full book. This reinforces loyalty through a direct financial return.

When is a cashback programme a smart move?

This model is a real all-rounder and works for many types of online shops. It is especially powerful in markets where price plays an important role, such as electronics, household items or (sports) food supplements. Do you have a lot of competition and want to give customers a clear, rational reason to buy from you (and come back)? Then cashback is a powerful weapon. It is super effective in lowering the purchase threshold and boosting conversion immediately, because the reward is clear to everyone: rock-solid euros of shopping credit.

The pitfalls for your business

The risk is that customers see it purely as a discount. This can hurt your brand perception and your bottom line. It builds a less strong emotional bond than a tier or VIP programme. Without smart analysis, you might mainly attract discount hunters instead of loyal customers.

The optimal choice: a mix that works

Why choose? The best approach combines the strongest points of each structure. For example: the repeat purchases of a points system, the higher order value through tiers, and the exclusive perks of a VIP Club for your top customers. This is how you can really make a difference when setting up an enterprise loyalty programme.

The golden rule: everything must be in one system

Such a smart mix only works if your loyalty, customer data and email are in one and the same system. Many platforms work with separate apps, which in practice creates duplicate contracts, data delays and technical headaches. This is a quick route to one of the common pitfalls in loyalty programmes.

The strength of Reloadify is that everything comes standard in one scalable e-commerce loyalty programme. Because your customer data and loyalty programme talk directly to each other, you can send an automatic email the moment a customer ‘only needs 10 more points for the Gold tier’. Right then, you send a personal e-mail with the perfect product tip to win that customer over. You'll never succeed with separate systems that don't talk to each other in real time.

The extra security competitors forget: the European fortress

As a big company, your choice of software is also a choice of certain rules and laws. The security of European data storage is a big advantage, not a boring detail in the small print. Do you store data with an American company? Then you are at risk because of laws like the CLOUD Act. That law can give US authorities access to your data, even if it is on European servers.

A smart company chooses a partner that not only protects its turnover, but also its most valuable asset: your customer data. With Reloadify, you choose a seamlessly integrated loyalty platform that is fully European. You are and remain in charge of your own data, 100% GDPR-proof and protected. That gives you the peace of mind you need to grow carefree.

Stop choosing, start combining

So the question is not ‘points or tiers?’. The question is: do you go for separate systems that cause problems, or do you take a smart, integrated approach that maximises your customer value? A hybrid model, built on a single platform, gives you the freedom and power to make your customers buy more often, spend more ánd become true fans.

Ready to stop the technical headaches and build a loyalty programme that really works for you? Schedule a strategy session: discover how an integrated loyalty programme can increase your CLV.