Is Your Loyalty Program a Leaky Bucket?
- The Treue Team
- Aug 17, 2025
- 3 min read
Updated: Oct 9, 2025
Is Your Loyalty Program a Leaky Bucket? Why Loyalty Cards and Punch Cards Are Costing You Customers
You gave away a free coffee. But do you know the name of the person who redeemed it? Do you know if they'll ever come back?
If the answer is no, your 'loyalty' program is a leaky bucket, and your best customers are dripping away.
For years, small businesses in New Zealand have relied on two main tools to encourage repeat business: the simple paper punch card and coalition programs. They seem like a good idea, they're easy, they're everywhere, and they feel like you're "doing something."
But these systems have hidden costs. They create leaks in your business that silently drain away your most valuable assets: your customer data, your relationships, and your brand identity. Let's break down the three leaks that are costing you customers.
The First Leak: The Data Drain
Data isn't just for tech giants. For a small business, customer data is simple: it's knowing who your best customers are, what they love to buy, and how often they visit. This is the insight you need to make smart decisions.
Paper Punch Cards give you zero data. A stamp is anonymous. A redeemed card is a ghost. You have no idea if that free coffee went to a loyal regular or a tourist you'll never see again.
Coalition Loyalty Programs collect a ton of data, but you don't truly own it. The data belongs to the network. You get a glimpse, but you can't build your own database or use the insights to create truly personalised experiences. Your most valuable asset is being used to strengthen their network, not exclusively your business.
Without owning your customer data, you're flying blind.
The Second Leak: The Relationship Gap
What happens when one of your top regulars stops visiting for a few weeks?
With a punch card, they simply vanish. You have no way to reach out, to see if everything is okay, or to entice them back with a friendly "we miss you" offer.
This is a major problem with coalition loyalty programs as well. While the customer is part of the app, you don't have a direct line of communication. You're forced to communicate through the generic, noisy channel of the third-party app, where your message is just one of many.
This relationship gap makes it impossible to build a real community or run effective win-back campaigns.
The Third Leak: The Brand Dilution
Your brand is your story, your atmosphere, your unique identity. A loyalty program should be an extension of that brand.
With punch cards, your brand is reduced to a generic stamp on a flimsy piece of cardboard in a wallet full of dozens just like it.
With coalition programs, your brand becomes just another logo in a long list, often right next to your direct competitors. The customer's loyalty shifts from your brand to the coalition's points. You become an interchangeable location to earn a generic currency, not a unique destination to be a part of.
When your loyalty program isn't branded as your own, you're building brand equity for someone else.
Plugging the Leaks: Rethinking Your Loyalty Program
The only way to fix these leaks is to use a system where you are in control. A private, branded loyalty program turns your business into its own ecosystem.
You own the data. You own the relationship. You own the brand experience.
This is the ultimate Loyalty card alternative and the evolution of the digital punch card. It’s a system designed to help you build your tribe, not just participate in someone else's network.
Stop renting your customers from a third-party app. It's time to own your relationships. Treue is the platform that helps you build your tribe, not someone else's. See how Treue puts you back in control.
Is Your Loyalty Program a Leaky Bucket? Why Loyalty Cards and Punch Cards Are Costing You Customers
By The Treue Team
