We have already mentioned the benefits and drawbacks of stamp cards and points-oriented loyalty programs. An interesting view that barely gets covered is price volatility. This is basically the way in which periodic changes in price of products and services bear upon customer retention and the aspects involved.

Both sorts of loyalty programs are somewhat touched by price volatility, implying that parties may be playing on price. Rewards are like in that they involve potential liability in the future. For punch cards, a decrease in price favours the business, as this reduces their award liability. On the other hand, a price increase benefits the customer, as their accumulated points are now worth more. The impacts of volatility are reversed in points-based programs. A price increase benefits the store, as it lowers the worth of accrued points.

Practically speaking, price volatility is rarely a problem and tends to normalize out in the long-run. If you are selling a highly volatile commodity, you may want to limit rewards liability to your customers by customising your loyalty program and introducing caveats. MazeCard offers merchants the ability to configure a range of constraints on programs that control the merchant's exposure.