How are loyalty cards profitable for companies

Question

I literally don’t understand how it’s profitable to spend points ie free money ??
Edit : I’m partially talking about spending points earned

In: 0

Answer 1

loyalty programs exist to promote repeat customers. its a psychological trick to get people to progress toward something(and our issues at leaving stuff like this unifinhsed if there is value ot be had).

w/e money you are losing in the prize you are giving away is more than made up by the fact you got that customer to walk in x number of times.