How to Start a High-Impact Shopify Loyalty Program That Boosts Retention and Revenue

Retention isn’t a checkbox. It’s the new battleground for e-commerce growth. As acquisition costs skyrocket and product parity looms, loyalty is quickly becoming the only defensible moat for online brands. And loyalty isn’t a fuzzy feel-good metric; it’s a multiplier. Brands that win repeat users win consistency, word-of-mouth, and higher margins.

Shopify doesn’t just give you a storefront—it gives you a full-stack platform to unify commerce, simplify operations, and plug into a universe of loyalty apps that let you earn, reward, and retain like never before. With a POS engineered for agility, scale, and personalization, Shopify helps you move fast, stay lean, and deliver experiences that keep customers coming back.

With 296.56M visits in May 2025, Shopify is a global traffic magnet and a potential game changer for brand loyalty programs. If you haven’t tried it yet or aren’t seeing the results you expected, this guide is for you.

Let’s break down why loyalty programs work, why Shopify is the smartest place to build one, and how to go from first-time buyer to forever fan—at scale.

In this guide we will cover:

• What is a POS loyalty program?
• Understanding Shopify’s POS loyalty environment
• Advantages of a POS loyalty program on Shopify for brands
• How to start a Shopify loyalty program for your business
• Caveats, thumb rules, examples

Why run a loyalty program for your e-commerce business? And why shopify?

Loyalty programs offer benefits that extend far beyond just sales volume. They ensure long-term connection with markets and communities, generate predictable growth through ‘emotionally captive’ brand loyalists, and effectively make the competition irrelevant. A loyalty program makes profound commercial sense: Returning buyers, after all, tend to generate 300% more revenue than first-time shoppers.

What better place to implement your loyalty program than on Shopify?

Shopify – a powerful, subscription-based cloud platform that allows anyone to build, launch and grow an online store - accounts for nearly 10% of the global e-commerce software market. 

Shopify’s flexible, scalable, and all-in-one architecture eliminates the need for costly integrations, reduces operational complexity, and lets entrepreneurs and established brands focus on core loyalty areas like innovation and customer happiness.

Over the years, Shopify has steadily strengthened its grip on key e-commerce and loyalty mechanisms, including digital shopping windows, advanced payment checkouts, fulfillment solutions, inventory management, and marketing/content tools. 

They all converge seamlessly to create a versatile POS loyalty environment that e-commerce brands and online businesses can use to automate success and grow fast. Perhaps the best part? Shopify is designed for the average user – no technical expertise required – and is accessible to anyone. 

What is POS loyalty?

POS in an acronym for Point Of Sale. It refers to the stage in the business cycle where goods and money are exchanged, and a transaction (such as a sale) takes place. For online sellers and e-commerce players, POS can be their own website or a managed aggregator platform like Shopify.

Shopify’s systems are purpose-designed to drive point-of-sale impact for online businesses across industries and size. And while Shopify provides e-commerce teams a robust plug-and-play ecosystem to run high performance loyalty programs, the platform itself doesn’t come with loyalty-first features. Instead, Shopify offers businesses the opportunity to sync with a vast number of third-party apps to achieve their diverse loyalty milestones.

Shopify’s loyalty apps

Unlocking the potential of Shopify loyalty programs for online and e-commerce brands. 

Apps on the Shopify App Store are optimized to enhance the functionality of Shopify’s native architecture and address loyalty mandates like customer engagement, adaptation and growth. 

Shopify’s loyalty apps simplify the migration of existing loyalty programs (or help establish a new one) to the Shopify platform, eliminating the need for cumbersome middleware or expensive integrations. 

Shopify apps seamlessly integrate with the platform's POS framework, enabling frictionless lock-in and providing a seamless in-store and online loyalty experience from the outset. This allows retailers to kickstart a powerful, 360-degree loyalty program on a platform that recorded a thumping 296.56M visits in May 2025, with minimum fuss.

Apps on the Shopify App Store typically address a comprehensive checklist of tasks spanning the whole loyalty value delivery chain. Some of these are member account creation, structuring of rewards earning, redemption, and refund, member engagement, campaign promotions, and loyalty analytics.

Which one’s the right one?

Shopify’s App Store features thousands of apps, ranging from free to premium models. The choice of app depends on the specific needs and complexity of the business, the levels of customization required, and the big vision and KPIs the company has set for itself.

If your brand already has a presence on Shopify, or if you are actively planning to open your store on the platform, a Shopify POS loyalty program should be the next natural step to pump sales, customer engagement ,and revenue growth.

Benefits of a Shopify loyalty program for merchants, brands, and revenue leaders

A Shopify loyalty program can be defined as a customer loyalty program that combines Shopify’s in-built analytics functionalities with the loyalty features of apps available on the Shopify App Store to allow in-person shoppers to earn and redeem rewards during the checkout process.

A Shopify loyalty program can help brands drive a host of critical outcomes, such as:

• More revenue via customer retention and repeat sales.
• Better relationships via recognition, personalization, and social sync.
• Greater ROI via more frequent transactions, higher order value ,and amplified Customer Lifetime Value (CLV). 

Types of POS loyalty programs you can run on Shopify

There’s more than one way to build loyalty on Shopify. Here are some tried-and-tested POS loyalty formats that brands use to drive repeat purchases, boost engagement, and grow faster.

1. Points-based POS loyalty program

The most popular and direct kind of Shopify loyalty program that lets customers load up on loyalty points that can be redeemed for exclusive deals and discounts, privileges like early access, free samples, and various goodies and experiences.

Milligram implemented a points-based loyalty program on Shopify, which helped the brand increase the average order value by 12% and in-store revenue by 16%.

2. Tier-based POS loyalty program

A tier-based loyalty program is most effective for audiences who value exclusivity and prefer to be treated with care and pampered. Brands can create point threshold-based levels or tiers on Shopify, such as Silver, Gold, and Diamond, linked to the value, nature, or frequency of the purchase, allowing members to earn points and progress up the ranks.

Clothing and accessory brand LIVELY operates a tiered rewards program that allows customers to earn points by following the brand on TikTok (10 points) or by making in-store purchases (30 points)—the more they spend, the better the perks.

3. Cashback-based POS loyalty program

A cashback-based POS loyalty program creates a snowball loop: The more customers spend, the more money they earn back as rewards, in the form of cash, store credits or gift cards. The immediate nature of the gratification is appealing to many and can help the business drive repeat purchases.

4. Subscription-based POS loyalty program

In this format, also known as a paid or premium loyalty program, members pay a recurring fee in return for ongoing, exclusive benefits such as early access, special discounts and offers, free or expedited delivery, and personalized perks. This works well for customers who relish an elevated level of exclusivity and value all year round.

Features and advantages of Shopify’s loyalty ecosystem for e-commerce brands

Let’s take a closer look at the benefits (and the features driving them) your brand stands to gain by activating a POS loyalty program that’s powered by Shopify’s powerful ecosystem of apps and partners.

1. Data consolidation

Data is the heart of contemporary loyalty programs. On Shopify, businesses by default get access to a Unified Customer Profile that curates and stores all of a member’s information in one place – including points earned, transaction history, purchase preferences, preferred categories, and various other parameters. 

By combining the dynamics of POS and e-commerce, Shopify’s Unified Customer Profile effectively serves as a Customer Data Management (CDM) tool. It generates a consistent stream of actionable insights into how your Shopify Loyalty Program is influencing customer behavior and decisions. 

The CDM provides a fertile foundation for data analytics initiatives, generating valuable insights across strategy, branding, content, GTM (Go To Market), customer experience (CX) and customer success. Merchants using Shopify’s CDM experience:

• 22% better total cost of ownership
• 25% lower annual software subscription and maintenance costs
• 8.9% uptick in gross merchandise value

2. Performance monitoring

POS loyalty mechanisms provided by Shopify’s apps are designed to track and monitor customer behavior and inform rewards-related decisions. 

Keeping a close tab on metrics such as the number of sign-ups, customers onboarded, repeat purchase rate, average order value, engagement with brand content (e.g., newsletters), percentage of repeat sales (i.e., transactions from returning customers), and redemption rate can help companies diagnose the health of their loyalty programs. 

It can help them evaluate loyalty goals like Annual Recurring Revenue (ARR), Customer Lifetime Value (CLV), and ROI on investments across various loyalty initiatives.

3. Bumping up the order value

An intuitive POS loyalty ecosystem incentivizes users to spend more than they plan to do, and that is precisely what Shopify’s loyalty apps are built to achieve. 

By sharing reminders of birthdays and special dates, by informing members that a few more points might make them eligible for a grand prize, or by alerting users to a limited-period deal, Shopify’s apps compel action and drive up transaction value, helping the business generate more revenue.

4. Personalized experiences

A McKinsey study shows 76% of consumers are frustrated when they don’t receive personalized communications or offers. 

There are Shopify loyalty apps that can help businesses cater to the unique needs of individual customers by:

• Building personalised moments and memories with anniversary and birthday gifts, meaningful rewards for special milestones, and discounts and offers based on past preferences and behavior.
• Elevating the customer experience (here’s why CX matters) with easy device functionality (UI/UX), memorable interface experiences, and frictionless management of points, redemption, and status.  
• Creating omnichannel POS experiences that let loyalty members collect, redeem and manage points across offline and online experiences. Physical and digital footprints are synced on automation, eliminating the need for manual integration.

• Creating bespoke mailers and newsletters based on audience persona and reading interests.
• Speeding up transactions (with Shopify’s Smart Grid) and ensuring that the member’s favorite items, discounts, and apps are readily accessible during checkout.
• Tailoring the look and feel of the company’s store interface on Shopify to resonate naturally with fans.
• Tweaking the functionality and appearance of widgets for more convenience.
• Customizing various elements like referral links, email notifications, rewards tiers, and more.

5. Content integration - email, SMS, newsletters 

Shopify’s loyalty apps are designed to integrate with popular email marketing tools and platforms, automating communication with the customer database. Brands can remind users about redemption, help members celebrate seasonal events and special occasions, and educate customers about platform features to help them maximize the benefits of their loyalty membership. 

Companies can also plug their newsletter to keep customers informed about interesting developments, share heads-up on marquee events and promotions, and significantly increase the intensity of engagement and transactions.

6. Insights - to understand, optimize, and scale a  Shopify loyalty program 

The best loyalty apps on Shopify tap into analytics and AI stacks to help companies identify bottlenecks, automate tasks, convert opportunities, and scale seamlessly. Brands running loyalty programs on Shopify can use the platform’s built-in analytics features to stay on top of what works, what doesn’t, and relentlessly refine strategy.

Shopify’s native analytics tools can generate visibility into important performance and business indicators across domains like member activity, redemption rates, and ROI by:

• Comparing sales across sessions and periods.
• Understanding how different channels are performing.
• Tracking average order value.
• Reviewing where visitors are coming from - by region, social media source, etc.
• Monitoring signals, behaviour, and impact over time.
• Accessing an unbiased evaluation of ROI metrics like customer acquisition cost, return on ad spend (ROAS), and others.
• Leveraging Shopify’s aggregated platform insights to benchmark performance against competitors.

Dynamic reports and customizable dashboards (that come with metrics deep-drills, geographical data, and rich visualization) can help brands make smart, data-informed decisions in the moment,  optimizing strategies and iteratively enhancing outcomes.

As part of Shopify’s loyalty environment, brand loyalty teams can use pre-built reports or create their own by adding additional metrics and drilling deeper to answer questions specific to their business. 

Shopify also allows for dragging, dropping, and rearranging dashboard panels to create a custom, at-a-glance overview of metrics that matter most to a company. Developments are synchronously updated across all reports in real-time, ensuring consistent and timely responses.

How to set up a Shopify loyalty program: Step-by-step explainer

Shopify loyalty program best practices to convert first-time users into long-time customers. Ensuring these can help your Shopify loyalty initiative get off to a quick start. 

1. Start small

Do a pilot first. Stay responsive for quick changes, document your learnings, and, as they say, ‘build-as-you-go’.

2. Get the goals right

Support sales? Boost order value? Build referral goodwill? Increase recurring revenue? Being clear on your driving goals enables you to maximize the mileage from Shopify’s POS loyalty program.

3. Choose the proper loyalty structure

Points-based? VIP tiers featuring premium rewards? Instant gratification driven with on-the-spot perks? Knowing what motivates your customers will help you build a loyalty journey with sticky milestones, so base your decisions on granularly defined personas.

4. Be clear about what you will reward for

How exactly can customers earn rewards when they are active on your company’s Shopify store? Through transactions only? Via referrals and reviews, also? When do they engage on social media? By spending a certain amount? Are there redemption limits? Will special scenarios and categories – a new launch, for example – fetch extra points? 

Define the rules of the game clearly, including who is eligible to enter, the eligibility parameters, rites, and rituals. Confusion kills participation, so keep the rules transparent, simple to understand, and easy to practise. Keep your loyalty program equitable so that everyone can earn and spend consistently.

Bodycare ecommerce retailer Blume lets customers earn Blume Bucks by following the brand on Instagram, placing an order, or referring friends to Blume.

5. Decide what your points are worth

Remember, your rivals are competing for your customers’ trust just as much as you are. Your loyalty program therefore, needs to stand out by expressing genuine gratitude and delivering differentiated value.

Ensure that your loyalty points translate into valuable rewards and memorable experiences, making participation worthwhile for your customers.

6. Enable multiple earning streams

Placing a limit on how much a member can earn is a deterrent. Keep loyal customers engaged for longer by allowing them to earn points in various ways, not just through purchase transactions.

Referrals, product reviews, newsletter signups, a Follow on social media, and participation in surveys are all viable and popular mechanisms for earning.

7. Choose the right shopify loyalty app

There’s an entire bunch of Shopify approved apps ready to turbocharge your loyalty program on the platform. While exploring and comparing them, focus on apps that provide benefits not available by default in Shopify’s POS environment. In addition, your app must:

• It should be easy for customers to interact with and transact on
• Allow for quick customizations
• Make management easy for loyalty teams
• Be compatible with your store settings, tech stack, and marketing tools
• Offer multi-language support
• Lie within your budget

8. Make it look good

Design a visually striking interface for your Shopify storefront that’s aligned to your brand mission to better connect with audiences. A nice name that aligns with your product philosophy is another way to establish emotion and stand out from the crowd.

9. Let everyone know

Ensure that users and customers are informed about your new (or changes to the existing) Shopify loyalty program. Embed program invites in app notifications, sms, mailers, newsletters, social media campaigns, order confirmation and post-purchase emails, influencer videos, landing pages, and website assets (banners, product description pages, sign-up pages). 

Display QR codes on store signage and offline channels that people can scan to sign up. You can personalize your invitation and attach a welcome gift, along with one for users who have shared positive reviews about your brand or product. 

Create educational content, such as explainer videos and infographics-based guides, that effectively addresses user queries, conveys the value of the program, and motivates people to participate.

10. Monitor and refine

Launching your loyalty program is just the beginning. Set up processes and train teams to track performance and progress, enabling you to utilize the learnings to enhance program outcomes steadily.

Turn shopify customers into loyal fans with Xoxoday Loyalife

Engage and captivate online shoppers effortlessly, fostering loyalty on Shopify with Loyalife.

Loyalife’s flexible API libraries and pre-built connectors seamlessly integrate brand loyalty programs, POS e-commerce platforms, CRMs, and other business-critical systems, eliminating the need for IT teams to manually enhance every stage of e-commerce loyalty programs.

With Loyalife, e-commerce brands can -

• Automate and optimize
• Get cross-channel insights
• Reduce complexity and overheads
• Streamline customer data for targeted loyalty efforts
• Ensure security, compliance, and scalability with an industry-leading enterprise-grade architecture.

Xoxoday Loyalife + Shopify = Boom!

Xoxoday Loyalife’s AI-powered loyalty platform and rewards solutions are trusted by global names like Mercedes, Adobe, and AT&T when it comes to building personalized outreach, deepening engagement, growing conversion rates, and increasing customer lifetime value.

To know more, Book a demo with our loyalty experts now.