In 2006, two marketing researchers ran one of the tidiest experiments in the history of loyalty schemes, at a car wash.
Half the customers were given a loyalty card that needed 8 stamps for a free wash. The other half were given a card that needed 10 stamps, but with 2 stamps already filled in. Read that again: both groups needed exactly 8 washes. The effort was identical. Only the feeling was different.
The results were not identical. 34% of the head-start cards were completed, against 19% of the blank ones. The head-start customers also came back sooner between washes. Same task, nearly double the completion, purely because the journey felt underway.
The researchers, Joseph Nunes and Xavier Drèze, called it the endowed progress effect. People who feel they have made progress towards a goal work harder to finish it. A blank card is a decision you are still weighing. A card with a stamp on it is a thing you have started.
Is this not just a trick?
It is the fair question, and it deserves a straight answer rather than a defensive one.
A trick is something that makes the customer worse off while feeling better. This does the opposite on both counts. The 10 stamp card with 2 filled in requires exactly the same eight purchases as the 8 stamp card, so nobody pays more, waits longer or gets less. What changed is that more people finished, which means more people got the free wash they were entitled to all along. The customers in the head start group were not fleeced. They were the ones who collected.
There is a version of this that would be a trick, and it is worth naming so you can avoid it: inflating the threshold and calling the difference a gift. A 12 stamp card with 2 pre-filled is a 10 stamp card wearing a bow, and a customer who works that out has learned something about you that no loyalty scheme survives.
The honest version is the one where the head start is real. Give the stamp, do not inflate the card to pay for it, and treat the slightly higher completion rate as the cost of a scheme that works rather than as a discount you are clawing back.
What this means behind your counter
If you run a paper stamp card, the fix is cheap: stamp the card twice on the first visit, once for the purchase and once "to get you started". You will give away slightly more, and finish far more cards, and a finished card is a customer who kept coming back.
If you run TapReward, it is already done. Every new customer's digital card begins with their first stamp awarded the moment they tap, so the card that lands in their Apple or Google Wallet is never blank. The scheme starts at "underway", never at "zero".
What a head start actually costs
Less than it feels like, and the arithmetic is worth doing once.
Say a six stamp card, and you decide to make it seven stamps with the first one free. Nothing about the customer's experience changes: they still buy six, they still get one. What changes is that a customer who would have abandoned a blank card at two stamps now abandons at three, and a customer who was going to finish still finishes.
So the cost is not the free stamp. The free stamp is worth nothing on its own, because it is only redeemable at the end of a card the customer has to complete anyway. The cost is the extra completions, which is to say the cost is the scheme working. If completions go up by half, your reward cost goes up by half and so does the number of customers who made six visits to earn it.
That is a trade most shops would take at the door. The stamp card calculator puts your own spend and margin into it if you want to see the shape of it rather than take my word for it.
The mistake to avoid
Give the first stamp, and then say so.
The effect runs on the customer noticing they have started. A card that quietly arrives with one stamp on it, handed over without comment, gets about half the benefit, because half the point is the small moment of "oh, I have already got one". It costs you one sentence at the counter: that is your first stamp, five more and the next one is on us.
The honest caveat
This is a study about loyalty mechanics in general, not a TapReward result, and your shop's numbers will be your own. That is rather the point: a digital card shows you the completion rate a paper card hides. If you want the rest of the research, the studies behind TapReward are summarised at Why loyalty works, and you can watch the mechanics run on live sample data in the demo dashboard.
Reference: Nunes, J. and Drèze, X. (2006). The Endowed Progress Effect: How Artificial Advancement Increases Effort. Journal of Consumer Research, 32(4).