Many WooCommerce stores start and end with discount codes. Out of the box, that’s all WooCommerce offers: coupons and basic price reductions. If you want customers to earn points for purchases, reviews, referrals, or birthdays, you need a loyalty plugin on top.
A points-based program means customers earn points for specific actions, those points are stored on their account over time, and they can redeem them later for rewards like money off, free products, or perks such as free shipping.
We want to show you how to design loyalty programs that work for your business, where tiered VIP systems beat flat rewards, and how redemption and expiration rules shape customer behavior. If you’re mainly trying to pick a tool, check out our separate comparison of WooCommerce loyalty plugins[a] to see which one fits your store best.
How points-based loyalty programs work
Points-based loyalty programs turn customer behavior into an internal currency they can reuse.
Underneath that idea are 3 systems working together:
- Earning mechanisms decide how customers collect points: a standard rate like 1 point per $1 spent, extra points for reviews or referrals, birthday bonuses, and temporary multipliers during promotions.
- Storage is what makes it a true loyalty program instead of a one-off discount. The platform keeps a running total of each customer’s points over time.
- Redemption triggers are the final step. They define when and how customers can trade points for value, whether that’s money off, free products, or perks like free shipping.
On top of these systems, you can layer different components:
- Tiered progression, e.g. where customers level up from Bronze to Silver to Gold as they spend more and unlock better earn rates or perks.
- Rewards for reviews, referrals, birthdays, or social sharing.
- Referral bonuses that reward both the person who shares and the friend who buys.
How plugins implement these systems
WooCommerce loyalty plugins are the tools that implement your earning, storage, and redemption systems without custom code. Most support basic “earn and redeem points” flows, but they differ a lot in how precisely you can set tier thresholds, expiration rules, and action-based rewards.
At a minimum, look for flexible points-per-dollar settings, support for non-purchase actions like reviews, referrals, and birthdays, visible cart-level redemption, and logic for tier progression. Email automation is just as important. Some plugins, like WPLoyalty, YITH WooCommerce Points and Rewards, or the official WooCommerce points extension, can automatically email customers when they earn points, are close to a reward, or have points about to expire. Others need you to wire this up with a separate tool, such as AutomateWoo or your email platform.
From there, you can choose between simpler plugins with pre-built campaigns and more advanced tools that support complex loyalty structures.
Designing your points-based loyalty scheme
A good points scheme starts with a clear earn-to-burn ratio. That’s how you calculate the value of your loyalty points. If customers earn 1 point per $1 spent and 100 points = $1 discount, they’re getting 1% back. You can change the numbers, but the math stays the same:
(points earned per $ / points needed for $1) × 100 = % back.
Higher earn rates feel more generous, but they don’t change the underlying value unless you adjust the burn side. For example, 10 points per $1 with 1,000 points = $1 is still 1% back; it just feels better because customers see their balance grow faster. Match this to your margins:
- Low-margin stores usually stay in the 0.5-1% back range.
- Higher-margin brands can safely offer 1-2% or layer bonuses on top.
Rewarding reviews, referrals, and other actions
Your base earn rate is just the start. A top loyalty program also rewards the moments around the purchase (reviews, referrals, birthdays, even social sharing) because those actions directly support your growth.
Most stores begin with a simple points-per-currency rule, then adjust it where it matters most. You might offer a higher earn rate on new arrivals or high-margin categories, or give VIP customers 1.5x points on every order to reflect their value. That base structure keeps things predictable.
On top of that, action-based bonuses deepen engagement around each purchase. Reviews deserve a more generous one-time reward because they directly boost conversion for future shoppers. Referrals justify your biggest bonuses, since each successful referral can replace a paid acquisition and usually brings in a higher-value customer. Birthday rewards sit in the middle: they’re about retention and sentiment, so the bonus should feel like a small celebration without eating into your margins. For social shares, where impact is harder to track, keep rewards relatively low so you encourage genuine sharing without inviting spammy behavior.
Finally, temporary multipliers let you highlight specific actions or products without changing your core loyalty rules. Double points weekends can lift sales in slower periods, while 3x points on specific categories help move seasonal or overstock items.
Tier design that drives spending
Tiered VIP systems split your loyalty program into levels, such as Bronze, Silver, and Gold. Customers move up those levels as they spend more over time, and each level comes with better rewards and perks. That progression makes the program feel more engaging than a flat earn rate, because there’s always a next status to reach.
Start with thresholds that are ambitious but realistic. Use your own data. If your customer’s average annual spend is around $500, setting the first tier at $300 makes it reachable. Putting the top tier at $2,000 might work for high-end stores, but it will be out of reach for many others. As a rule of thumb, 3 tiers are enough:
- Bronze as the easy entry point
- Silver as the main goal for regular shoppers
- Gold as the more exclusive level for your best customers
Tiers should change how valuable the program feels. A simple structure looks like this:
- Bronze earns 1x points
- Silver earns 1.25x points
- Gold earns 1.5x points
When you combine tier bonuses with product-based bonuses, the earn rate stacks. For example, a product multiplier simply means offering extra points on a specific item or category, such as “double points on socks.” If a Gold customer normally earns 1.5× points and buys a product with a 2× points offer, their total earn rate becomes 3× the base rate. Making this visible at the right moment, such as showing how many extra points a customer earns because of their tier, helps reinforce the value of leveling up.
Finally, decide how customers keep their status. Most stores use a 12-month qualification window, with a grace period if someone just misses the target. Always warn people before they drop a tier and show exactly what they need to do to maintain it.
When and how customers should redeem their points
Manual redemption tends to outperform automatic discounts. When customers actively choose to apply points, the reward feels earned rather than hidden in the price. That small moment of choice increases perceived value and makes points feel worth saving.
You may want to consider the following redemption rules:
- Minimum thresholds stop tiny redemptions.
- Maximum caps control how quickly large balances are spent.
- Tier-based limits reinforce progression without changing earn rates.
Capping redemptions, such as allowing points to cover part of an order rather than the full total, does not reduce the value customers receive overall. It spreads redemptions across multiple purchases instead of a single large one, which helps maintain purchase frequency and keeps loyalty top of mind.
Visibility matters as much as rules:
- Cart-level point selectors with live previews see the highest usage.
- Checkout-only options are often missed.
- Product page messages prime customers before they reach the cart.
- An account balance alone is rarely enough.
Point expiration timing and reminders
Point expiration is useful when it’s designed to encourage action, not punish loyalty. The most common approach is activity-based expiration, where points expire after 12-18 months of inactivity, and any purchase resets the clock. This keeps engaged customers safe while nudging dormant ones to return.
Rolling expiration is stricter but effective for high-frequency stores. In this setup, points earned in January 2024 expire in January 2025, regardless of later activity. It creates constant urgency, but it only works when customers buy often enough.
Reminders matter as much as the rule itself. A 30-day notice builds awareness, a 7-day reminder prompts action, and a final 24-hour message taps into loss aversion. Without clear reminders, expiration feels unfair and erodes trust instead of driving engagement.
Using referrals to grow your customer base
Referral programs are one of the strongest additions to a points-based loyalty scheme because they replace paid acquisition with customer-led growth. If you normally spend $50 to acquire a customer through ads, giving 1,000 points or a $10 equivalent for a successful referral is still cheaper, and referred customers usually have higher lifetime value.
For best results in WooCommerce, use dual rewards. Give referrers points (500-1,000) when a friend buys, and offer new customers a good first-order incentive (10-20% off or 200-500 points). Single-sided rewards usually don’t work!
Attribution is what ties this back into your loyalty program. Unique referral links, cookies, and email-based tracking over a 30-90 day window let your plugin identify which existing customer drove each new customer and apply rewards automatically.
Design loyalty schemes that build customer relationships today
A good loyalty program gives customers a reason to come back, remember your brand, and choose you instead of a competitor. When points build up over time, people think twice before buying elsewhere.
Rewarding more than just purchases also pays off. Points for reviews, referrals, and birthdays help you collect social proof, reach new shoppers, and create moments that feel personal. Tiers and small perks make your best customers feel recognised, which often leads to higher lifetime value and stronger word-of-mouth.
You don’t have to launch every feature at once. Start with a clear point currency, simple earning rules, and straightforward redemptions. As the program proves itself, you can add tiers, referrals, and special campaigns. If you also want targeted discounts alongside your loyalty setup, WooCommerce Discounts can run member-only offers, role-based pricing, and BOGO deals that sit neatly on top of your points system.
