There are so many different types of customer loyalty programs, and even more ways to reward loyalty, but points-based systems have long been the standard for eCommerce brands. It’s easy to see why: they’re simple, effective, and most customers love them!
But we are often asked if there’s a better alternative to loyalty points. Maybe your specific brand or products don’t lend themselves well to ongoing points accumulation. Or perhaps you feel as if points are generic or impersonal, and your low redemption rates reflect that.
Some customers might not appreciate the intangible, time-consuming process of building enough points up to actually get a substantial reward. So, consider some of the loyalty points alternatives:
- Tiered loyalty programs based on spend or engagement
- Cashback or instant discount incentives
- Product-based rewards or gifts with purchase
- Experiential or community-based rewards
- Hybrid models that blend points with membership or VIP access
We’ll help you weigh your options and tailor your loyalty program accordingly below, including tips on testing and refining new reward structures.
This is effortless with the right backend in place. So, if you aren’t already using the Rivo Shopify loyalty program, learn more about what it can do for you today!
How Loyalty Points Work
The idea behind loyalty points is simple - customers earn points as they shop, which they can later redeem for rewards like discounts, free products, or exclusive access.
Customers can also accumulate points through non-purchase behaviors like referring friends, writing reviews, following on social media. In some cases customers might get free points just for celebrating a birthday, or on the anniversary of their first purchase.
Part of the appeal lies in flexibility. Brands can decide what actions to incentivize, how many points are awarded, and what rewards are unlocked at different thresholds.
The setup usually feels fair to the customer, too - the more they engage, the more value they get. Points-based loyalty can increase repeat purchase rate, grow customer lifetime value, and turn casual shoppers into brand fans when done right.
But for all the strengths of points, they’re not without limitations. Let’s take a look at a few of the most common reasons we see brands searching for an alternative to loyalty points.
Why You Might Look for an Alternative to Loyalty Points
Not every brand or product type plays well with a long-term points strategy. The rewards don’t always land the way they should, either. While points can be a smart foundation for retention, they aren’t always the best standalone solution for every brand. Here’s why.
Points Don’t Always Feel Tangible or Immediate
Points are meant to build anticipation and give customers something to strive towards, whether it’s $20 off their next order or perhaps a free gift. But that can sometimes backfire since we as humans, are all about short-term gratification.
Telling someone they earned 100 points can feel like a slap in the face if they have to earn 10,000 to get something of value. It’s just not the same as giving them $10 off immediately, or offering instant access to free shipping.
The program starts to feel like a chore instead of a perk if the math isn’t obvious or the reward is too unattainable. Delayed value can mean lost momentum for some customers.
Redemption Rates Can Be Low
It’s not uncommon for loyalty programs to see strong signup numbers but weak follow-through. This could be because customers don’t understand how to redeem rewards or they simply forget they exist.
At any rate, points sit unused. That’s lost engagement and missed opportunities to drive repeat purchases. Redemption should be effortless rather than buried in a dashboard or an email customers never open.
Points Programs May Feel Generic or Impersonal
In this day and age just about every eCommerce brand has a loyalty program in place, and they tend to follow the same script. Points are everywhere, which can be a problem for brands trying to stand out among the competition.
Your loyalty program might feel like a copy-and-paste version of every other eCommerce brand without a thoughtful design. Customers don’t remember the program - they just remember the number. A deeper connection is missing.
Not All Products or Brands Lend Themselves to Ongoing Point Accumulation
Points work best when customers shop regularly or engage often. Think high-frequency verticals like beauty, supplements, pet care, etc.
However, there are some products with a longer purchase cycle like luggage, mattresses, premium appliances, etc. Customers won’t see much value in accumulating points for these since they won’t rack them up fast enough.
These are cases where focusing on instant rewards creates more value - like instant discounts, gifts with purchase, or milestone unlocks such as a one-time perk after their first or second order.
What Alternative to Loyalty Points Works Best for eCommerce Brands?
Whatever your reason is for looking into an alternative to loyalty points, there are plenty of viable options worth testing in your program. Here are some of the most effective we’ve seen in our case studies at Rivo.
Tiered Loyalty Programs Based on Spend or Engagement
You can shift away from loyalty points by introducing loyalty tiers, which offer incremental benefits based on how much a customer spends.
For instance, the lowest tier might offer early access to new products, but the next tier up could include free shipping on every order. The tier above that could unlock free gifts in every order.
Tiers tap into progression. They give customers a reason to keep coming back, not just for the product, but for the status. These are great for brands with loyal returning customers and a wide product catalog.
Take a look at the Kitsch loyalty page, for instance. There are four tiers: Ready to Reset, Treat Yourself, Ritual Revamped, and All Access. Each tier provides a little bit more, from exclusive access to VIP support, new product testing, and more.
Cashback or Instant Discount Incentives
One of the most straightforward alternatives to points is cashback or instant discounts. It’s more or less the same thing, just with a more upfront benefit. Instead of saving up to redeem, customers can get rewarded in real time.
This approach works especially well for first-time buyers or lower-frequency brands where points might not build up fast enough to matter. The perceived value is immediate, and that can be the difference between a one-time order and a second purchase.
Product-Based Rewards or Gifts With Purchase
Instead of offering a dollar-based reward, give customers something they didn’t expect - like a deluxe sample, a travel-size version, or a product they haven’t tried before.
It’s less about the dollar value and more about the experience. These kinds of rewards can introduce customers to new SKUs, drive higher AOV, and create more memorable moments. They're especially effective in categories like beauty, wellness, and food, where discovery is part of the appeal.
Experiential or Community-Based Rewards
Value doesn’t have to be about discounts or free stuff. Some customers are more motivated by things like exclusive content, early access to drops, behind-the-scenes updates, or invite-only virtual events.
These experiences deepen emotional connection and help differentiate your brand in crowded categories. This model works well if you have a clear brand voice, a strong community, or are building a product that customers identify with on a deeper level.
Hybrid Models That Blend Points With Membership or VIP Access
Who said you had to pick just one type of reward structure for your loyalty program? Take a look at the best customer retention example. You’ll see they lean into multiple avenues, so there’s something for everyone.
This could include layering points inside a paid membership or using point accumulation to unlock tiered VIP perks. You could even look into how a subscription-based loyalty program could work in accordance with points.
This approach works best for brands with a wide range of customer types. You can let casual shoppers earn small rewards over time while offering deeper perks to high-LTV customers through access-based benefits.
Of course, you’ll need effective loyalty status segmentation to make this work - which is why you need the right platform for loyalty program management. That’s where Rivo comes in, giving you more control and flexibility than any other solution on the market.
Testing and Refining New Reward Structures
With so many great loyalty points alternatives, where do you even begin testing and refining reward structures? Don’t overcomplicate things or expect to perfect your loyalty program the first time around.
Whether you’re moving away from points or just testing something new, the smartest brands treat rewards like any other part of their business: something to test, learn from, and evolve. Here are some tips to help you get started.
Start Simple and Gather Data
Start with one or two reward options and a clear value exchange. Then watch what happens. How many people opt in? How many redeem? What does it cost you to deliver?
Complexity early on just creates noise. Keep it lean until the data says otherwise. A rule of thumb we like to follow is to just change one variable at a time so you can attribute data accordingly. Rivo makes it easy to track and leverage customer loyalty analytics.
Ask Customers What They Want
Why play the guessing game in choosing an alternative to loyalty points if you have a group of extremely loyal customers ready to give you direct, actionable feedback?
Run a post-purchase survey, or test a few options via email. What sounds good in a brainstorm might not resonate in real life. There’s no better way to find out than by going straight to the source!
Use Segmentation to Match Rewards to Customer Types
Different customers respond to different rewards, so you probably don’t want to just offer a single alternative to loyalty points. First-time buyers might love instant savings. Returning VIPs might care more about early access or status perks.
The point is, you miss the chance to deepen relationships in more relevant ways if you treat all your customers the same. Use order history, product preferences, or even quiz data to tailor what you offer - and to whom.
Be Willing (and FAST) to Pivot
If a reward isn’t getting used, change it. If redemptions spike but margin takes a hit, adjust. Loyalty isn’t set-and-forget. Rather, it’s something you constantly tune based on what’s working and what’s not.
The brands that win don’t wait around to “see how it plays out” - they move quickly and make improvements in real time. You can learn more about how to reward customer loyalty in our blog if you want additional inspiration.
Otherwise, take these loyalty points alternatives and find out firsthand which works best for your brand!
Closing Thoughts on Loyalty Points Alternatives
That does it for our overview of all the best alternatives to traditional points-based loyalty programs. Remember, there’s nothing wrong with loyalty points - this is one of the best ways to buy your loyalty program.
There are so many great customer loyalty strategies worth exploring, and we hope you feel confident in which alternative to loyalty points will work best for your brand.
Tiers, instant rewards, or product-based perks might deliver more value with less friction depending on your product, purchase cycle, and audience. The goal is always the same: reward the behavior that grows your business.
What matters more than the reward structure is the system you use to build your program. Set yourself up for success with the platform built for retention, Rivo. See how we compare below:
