At its core, a loyalty program taps into basic human psychology. When customers see they're making progress toward a reward, they're more likely to continue. This is called the Endowed Progress Effect.
Once customers have accumulated stamps, they don't want to "lose" their progress. This keeps them coming back to your shop instead of trying a competitor.
Here's why loyalty programs actually work better for small businesses: You can greet regulars by name, remember their usual orders, and create an authentic experience that big chains can never replicate.