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
The “free money” they’re providing you via the card costs them very little compared to the money they make from you when you decide to keep going there (to get stamps on your loyalty card) vs going somewhere else.
Lets say it costs a restaurant 10 cents to make a coffee, and they charge you $1. They have a loyalty card where after 10 coffees you get a free one.
So every time you buy a coffee from them, they profit $0.90 (because the coffee costs them 10 cents and you pay $1). After you’ve bought 10 coffees, they have made $9.00 profit from you, and giving you your free coffee with the loyalty card costs them only 10 cents!
Put another way: **Every 10 times when you get a free coffee, it costs them 10 cents. But every single time you buy your coffee elsewhere it costs them 90 cents (in lost profit they would have made)!**
And maybe on some of those 10 times you go there for coffee you buy something else like a muffin or a sandwich, making them even more profit from you. But even if you make no other purchases, they still make more profit from having the loyalty card and having to give you a free coffee every once in a while vs you going somewhere else.
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