Loyalty Programs Are Costly — Are They Worth It?

 

Loyalty programs are having what many in the industry are calling a “full-circle moment.” From humble punch cards to flashy apps and now back to streamlined, app-less experiences, the concept is evolving rapidly. Recent digital innovations from Portillo’s, Birdcall, and 7 Brew highlight a shift toward making loyalty more seamless, less intrusive, and integrated into the ordering process without requiring customers to clutter their phones with yet another app. But with all this tech and hype — are loyalty programs really worth it?

The answer depends on who you ask. But from the perspective of the Grocerant Guru®, the verdict has remained consistent: Price, Service, and Food Quality will always trump loyalty programs. Let’s explore why.

 

The Modern Loyalty Landscape

In 2024 and 2025, dozens of foodservice brands jumped back into loyalty — either by launching new app-based programs (like Cava, Walk-On’s, Jack in the Box, and White Castle) or evolving toward app-free models (like Portillo’s and Birdcall). According to Informa Engage’s June 2025 Market Leader Report, more than 25% of operators are now interested in app-less loyalty, citing customer friction and app fatigue as major pain points.

Portillo’s recently rolled out its digital wallet-based loyalty program — a “surprise and delight” initiative that allows users to check in at stores or online and receive personalized perks. Meanwhile, Birdcall embedded loyalty into its point-of-sale system, allowing customers to earn rewards with just a phone number.

While this tech-focused strategy improves engagement and gives brands valuable customer data, the question remains: Do these programs drive real loyalty, or just repeat transactions when discounts are dangled?

 

The True Drivers of Loyalty: Price, Service, and Food Quality

The Grocerant Guru® has studied food retailing trends for decades, and the data doesn’t lie: consumers are loyal to value, not gimmicks.

Here’s why:

1.       Price Perception Drives Visit Frequency
A 2024 Food Marketing Insights study found that 62% of QSR and fast-casual customers say they return to a restaurant primarily because of “perceived value,” not because of points or perks. With food inflation still a factor, customers seek everyday low prices over one-off rewards.

2.       Service is Loyalty’s Secret Weapon
According to Deloitte’s 2025 Future of Restaurants Report, exceptional service was named by 71% of diners as more important than digital rewards. Fast, friendly, and frictionless in-store experiences build emotional connections that no digital point system can replicate.

3.       Food Quality Creates Lasting Memories
Loyalty built on flavor lasts longer than any app-based point chase. Brands that focus on consistent quality, innovation, and craveability outperform even the most sophisticated loyalty platforms. Taste is timeless; points are perishable.

 

Three Industry Examples That Prove the Point

1. In-N-Out Burger – No Loyalty Program, Just Legendary Service

In-N-Out doesn’t have a loyalty app, punch card, or email list. Yet, it has one of the highest customer return rates in the fast-food industry. Why? Consistent quality, fair pricing, and top-tier service.

2. 7 Brew Drive Thru Coffee – App-Free But Fastest-Growing

Despite bucking the app trend, 7 Brew became the fastest-growing foodservice chain in 2024 by sales percentage. Their loyalty program is simple, app-free, and embedded in the experience. Their success proves that ease of use matters more than fancy features.

3. Texas Roadhouse – No Points, Just Packed Dining Rooms

Texas Roadhouse has no traditional loyalty program, yet regularly reports high guest satisfaction and repeat business. It thrives on affordable meals, friendly staff, and a fun, energetic environment — not on rewards.

 

So, Are Loyalty Programs Worth It?

They can be, but only if they enhance — not replace — the core essentials of the dining experience. For brands with poor service, inconsistent food, or high prices, no amount of loyalty tech will fix the churn.

As the Grocerant Guru® puts it:

“Loyalty programs are like dessert — they’re a nice bonus, but if your main course is bland, no one’s coming back for more.”

In other words, operators should invest in quality, pricing strategy, and customer-facing service training before sinking resources into complex digital loyalty platforms. Only then will those points start to matter.

 

Bottom Line: Loyalty programs are evolving — but the fundamentals haven’t changed. Customers return for good food, fair prices, and memorable service. Anything else is just gravy.

Outsourced Business Development—Tailored for You

At Foodservice Solutions®, we identify, quantify, and qualify new retail food segment opportunities—from menu innovation to brand integration strategies.

We help you stay ahead of industry shifts with fresh insights and consumer-driven solutions.

🔗 Connect with us on social media: Facebook, LinkedIn, Twitter

Ready to Find Your Next Success Clue?

We specialize in outsourced food marketing and business development ideations—helping brands seize opportunities in food retail, technology, and menu innovation.

📩 Reach out today: Steve@FoodserviceSolutions.us
🔗 Follow us: Facebook, LinkedIn, Twitter