Loyalty
Digital loyalty cards: pros and cons for customers and businesses
A paperless loyalty card has obvious benefits and a few drawbacks that rarely get mentioned. Here are both columns, from the customer’s point of view and then the business’s, with a point-by-point comparison against the physical card.
Key takeaways
- For customers: nothing to carry, nothing to install, an always up-to-date balance, and rewards that no longer get lost.
- For businesses: visit data and a free lock-screen channel to bring customers back.
- The real drawbacks: the phone has to be charged, some customers stay attached to cardboard, and data collection brings in Law 25.
What are the benefits of a paperless loyalty card for customers?
For customers, a paperless card cannot be lost or forgotten: it lives on the phone, with no app to install. The balance updates on its own, an available reward shows on the lock screen, and the wallet no longer overflows with cardboard.
- Always on hand. The phone comes along every day; the cardboard stays in last season’s coat.
- Nothing to install. Apple Wallet and Google Wallet are already on the phone: one QR code scan is enough.
- Balance visible at any time, updated remotely after each visit.
- No lost rewards. A three-quarters-full card that disappears means a frustrated customer; digital ends that.
- Personal touches: a note on their birthday, a reminder when only one stamp is left.
What advantages does a digital loyalty card offer over a physical card?
Compared with a physical card, a digital card adds three things: data (who comes back, how often), follow-up (notifications to lapsed customers or those close to a reward) and remote updates. A physical card costs almost nothing, but produces neither information nor extra visits.
| Criterion | Physical card | Digital card (Wallet) |
|---|---|---|
| Lost or forgotten | Often | Almost never |
| Knowing your customers | Impossible | Frequency, last visit, top customers |
| Reaching a lapsed customer | Impossible | Targeted notification |
| Fraud (fake stamps) | Easy | Every visit is recorded |
| Unit cost | A few cents per printed card | Monthly subscription, no printing |
| Measured result | Not measurable | 46% of cardholders came back, +5% revenue on average (ARSOM deployments, 2026) |
What are the disadvantages of a loyalty card?
Every loyalty card has a cost: the rewards, staff time and, for customers, the feeling of being solicited. Digital cards add their own limits: the phone needs battery, some customers prefer paper, and collecting data brings in Quebec’s Law 25.
Drawbacks of any loyalty card
- The cost of rewards, including for customers who would have come anyway. Hence the value of costing rewards at cost price.
- Time at the counter, if the gesture is not quick.
- Fatigue: too many cards, too many messages, and customers tune out.
Drawbacks specific to digital cards
- Battery: no phone, no card. Plan a name lookup at the counter.
- Some customers stay attached to cardboard; helping with the first scan solves most cases.
- Compliance: names, emails and purchase history are personal information; separate consent, a privacy policy and a right to deletion are mandatory in Quebec.
- Vendor lock-in: check that you can export your customer list.
How do you limit these drawbacks?
Keep the reward simple and reachable, limit notifications to one or two useful ones a month, train staff on the sign-up gesture, plan a name lookup for customers without their phone, and choose a tool that exports your data and documents its Law 25 compliance.
Most drawbacks are solved at launch, not after. For the step-by-step setup, see how to create a digital loyalty card in 6 steps; to compare tools, the best loyalty card software in Canada.
Frequently asked questions
Does a digital loyalty card work without an internet connection?
Yes, for showing it: an Apple Wallet or Google Wallet card is stored on the phone and its code displays offline. The connection is only needed to receive the balance update, which arrives as soon as the phone reconnects.
What happens if the customer changes phones?
Wallet cards generally follow the customer’s Apple or Google account when a phone is restored. Otherwise, customers can get their card back from the business: with ARSOM, signing up again with the same email sends an access link to the existing card, balance included.
Do older customers use digital cards?
Less than others; it is one of the real drawbacks. The fix is simple: offer sign-up at the counter with staff helping with the scan, and keep a fallback for customers without a smartphone, such as looking them up by name.