How much does a free-coffee loyalty card really cost a café?
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Less than it looks. On a buy 9, get the 10th free card, one coffee in ten is free: 10% at menu price. But the reward costs you only what one coffee costs to make, and only customers who finish a card claim it. The software can cost more than the coffees, so check its monthly fee.
The sum, with example numbers
Use your own numbers. These are examples only: a coffee that sells for A$5.00 and costs you A$1.20 to make (beans, milk, cup and lid).
On a buy 9, get the 10th free card:
- What the customer pays across one card: 9 coffees × A$5.00 = A$45.00.
- What the reward is worth at menu price: one A$5.00 coffee, which is 10% of the A$50.00 menu value of all ten coffees.
- What the reward costs you: one coffee's making cost, A$1.20. That's about 2.7% of the A$45.00 the customer paid for the card.
Only customers who finish a card claim the reward
A stamp card only costs you when someone fills it. How many do is up to your program, and the research gives a feel for it. In Nunes and Drèze's car-wash study (2006, Journal of Consumer Research), 19% of blank 8-stamp cards were redeemed, and 34% of 10-stamp cards that started with 2 stamps already filled in (the study). Either way, most cards in that study never reached a reward.
Every reward you do hand over went to someone who kept coming back.
The honest catch
The making cost is not the whole story. If a regular would have bought that 10th coffee anyway, you've given away its menu price, not just its making cost. A stamp card pays for itself when it brings in visits you would otherwise have missed: the regular who picks you over the café next door because they're 7 of 10 stamps in. Kivetz, Urminsky and Zheng (2006) found exactly that pull on a real café's card: customers bought coffee more often as the free one got closer (the study).
A stamp card compared with 10% off
Both give away 10% at menu price. Who gets it is the difference.
| Buy 9, get the 10th free | 10% off every coffee | |
|---|---|---|
| Who gets it | Only customers who come back 9 times | Everyone, including one-off visitors |
| Given away over 9 coffees (example numbers) | One coffee, costing you A$1.20 to make, after the 9th | A$0.50 off each coffee: A$4.50 in takings |
| What it encourages | The next visit | This visit |
The software is often the bigger cost
A stamp card's software can cost more a month than its free coffees. Using the same example margin of A$3.80 a coffee (A$5.00 less A$1.20):
- Square Loyalty starts at A$49 a month per location, and rises to A$99 or A$149 with more loyalty visits (Square's Australian page, checked 27 September 2026 and again 29 September 2026). A$49 is about 13 extra coffees a month just to cover the fee.
- Stamp Me is A$49 to A$199 a month for one location, with its Lite and Elite prices marked as a limited-time offer (Stamp Me, checked 29 September 2026).
- Rewardtree is 60 days free, then A$9.99 a month per shop, or A$99 a year per shop. That's our end-of-year special for businesses that sign up by 31 December 2026: you keep it for every shop, including shops you add later, for as long as you stay. From 1 January 2027, businesses that sign up pay A$19.99 a month or A$199 a year. At the same example margin, a few extra coffees a month cover the fee.
Put your own fee and number of locations into the loyalty cost calculator to see the yearly figure.
Making the reward pay its way
- Make it their usual order, not your dearest item. It's what they want, and its making cost is known.
- Keep the card short enough to finish. A daily or weekly regular should reach the reward within weeks. Buy 9, get the 10th free does that for a café's daily and weekly regulars.
- Check the numbers after a month. On Rewardtree your Customers page shows each customer's visits and how close they are to a reward, and every reward used.
We make Rewardtree, so weigh our view with that in mind. The example numbers are examples; the research and prices link to their sources.
More questions, answered#
Is buy 9, get the 10th free a 10% discount?#
At menu price, yes: one coffee in every ten is free. At cost it's much less, because the free coffee costs you only its beans, milk and cup. And unlike 10% off, it only goes to customers who came back nine times.
What should the free reward be?#
The thing they buy every time, like their usual coffee. It's easy to understand, customers want it, and it costs you its making cost, not its menu price. Keep it certain: a prize draw is not a reward people work towards.
What if a customer buys two coffees at once?#
They get one stamp, not two: a Rewardtree stamp card gives one stamp per visit. A visit is 4 hours by default, so a coffee at 7am and another at 2pm each earn a stamp.
Does a shorter card cost me more?#
A little, per coffee: pay for 7, the 8th free, gives away one coffee in eight instead of one in ten. In return, a card that's quicker to finish keeps regulars coming, and more of them reach the reward.
