Consumers love to get rewards, but many, especially younger shoppers, are put off by the hassle of collecting various kinds of loyalty points. Blockchain technology could make loyalty programs more appealing by making them both easier to use and more secure.

Chris Shalchi, senior executive, BigCommerce

Chris Shalchi, senior executive, BigCommerce

Customer loyalty programs have long been a mainstay of ecommerce and retail. With 62% of millennial shoppers and 54% of the larger population choosing to shop only at their preferred brand—becoming that preferred brand is a lucrative proposition.

However, while everyone likes to be rewarded, the average consumer is growing wary of the traditional loyalty program. In fact, sources say that 33% of millennial consumers dislike reward programs simply because there are too many cards to carry.

Instead of having unique accounts for all of their airline miles and a wallet overflowing with sandwich shop punchcards, blockchain promises a way to cut down on clutter.

Since the point of loyalty programs is to forge a better relationship with customers, some retailers are exploring new technologies to reinvent the customer loyalty program. Enter: blockchain technology.

What is Blockchain?

Blockchain is most often associated with cryptocurrency like Bitcoin, but the technology can be used for accounting any kind of transaction. Blockchain is a decentralized public ledger for storing transactional data. The blocks store digital information, and each one has a unique hash that identifies it from all other blocks in the chain.


The information, once recorded and stored on the chain, is immutable, making the data very secure from fraud.

How Can It Reinvent Customer Loyalty?

Blockchain technology can improve customer loyalty programs by solving for some of the issues that keep customers from using them.

The essential premise of a blockchain loyalty program is this: Instead of joining dozens of different programs for each business a consumer is loyal to, they can join a network. Shopping with businesses in that network provide reward tokens. These tokens don’t expire and can’t be taken away. And they aren’t just redeemable at one business but with any business in the network.

Blockchain makes this possible by keeping a record of all of the transactions that can be accessed by the whole network. Instead of having unique accounts for all of their airline miles and a wallet overflowing with sandwich shop punchcards, blockchain promises a way to cut down on clutter.

As an advantage for businesses, these programs can also be less expensive to create and maintain. They can also provide greater security and transparency for customers.


Who’s Doing This Already?

Chanticleer Holdings, an investor in several chain burger restaurants including BGR, Little Big Burger, and American Burger Co., is one pioneer in blockchain loyalty through a collaboration with MobivityMind.

With the Chanticleer loyalty program customers who eat at one of their restaurants earn a cryptocurrency called Mobivity Merit, which can be redeemed across brands and traded freely through a secure blockchain system.

Is Blockchain the Future of Customer Loyalty?

Blockchain’s secure, decentralized ledger may well provide a solution for some of the issues customers have with traditional rewards programs like fraud concerns, inflexibility, and clutter.

Blockchain-backed customer loyalty programs are still gaining traction, but it will be interesting to see if this trend fully emerges and is embraced by more and larger companies looking to compete for customers’ loyalty.

BigCommerce is the provider of ecommerce platform technology for 17 of the retailers in the 2019 Internet Retailer Top 1000.