eCommerce Loyalty Program Examples: Points, Tiers, and Paid Memberships Compared

Hayes Media is an eCommerce growth agency that builds loyalty programs for DTC and Shopify brands, alongside email, SMS, and subscribe-and-save. The four loyalty program structures that work for an eCommerce brand are points, tiers, paid memberships, and subscribe-and-save. Dr. Squatch runs a clear points program, Chubbies runs tiers, Thrive Market runs a paid membership, and Native runs subscribe-and-save. Each one targets a different repeat purchase and costs margin in a different place, so the right one depends on how often your customers already buy.

Below is one real example of each, from the brand's own page, with what it costs you, the order it's built to win, and the emails that get members to use it. We didn't build any of these programs. They're here because each brand publishes its rules where anyone can read them.

What are the main types of eCommerce loyalty program?

There are four, and they differ in who pays for the reward and when.

Points. Customers earn points for every dollar they spend and trade them for money off a later order. The reward comes after the spend, and you only pay for it when points are redeemed.

Tiers. Customers move up levels as their spend over a set period rises, and higher levels get better perks. The reward goes to the people already spending the most.

Paid memberships. Customers pay a fee for lower prices or extras. The customer pays first, and the perks have to feel worth more than the fee.

Subscribe-and-save. Customers get a standing discount for agreeing to recurring delivery. The reward is built into the price of every subscription order.

These structures can be combined. Dr. Squatch, Chubbies, and Native all run points and tiers inside the same program, and Native runs subscribe-and-save next to it.

Where does customer loyalty start?

Loyalty starts before the first order, in the whole buying experience: the ad, the product page, checkout, delivery, and whether the product does what you said it would. The second order is where that loyalty shows up in your numbers. A loyalty program can't rescue a first order that went badly. What it can do is give a happy customer a reason to choose you again.

If you haven't measured your repeat purchase rate on a fixed window yet, do that before you pick a structure. You'll need that baseline to know whether your program worked.

How does a points-based loyalty program work?

You give customers points for spending, then let them trade those points for a discount on a later order. Dr. Squatch, the men's soap and grooming brand, runs a clear public example.

On its loyalty page, Dr. Squatch says members at the entry tier earn "1 point for every $1 spent". Points redeem as fixed discounts with a minimum order attached: 50 points gets "$5 off orders $15+", 100 points gets "$10 off orders $30+", and the ladder runs up to 300 points for "$30 off orders $90+". Its top tier, Squatch Champion, earns 2 points for every $1 spent.

Margin cost. On those published numbers, a customer who redeems everything gets $5 back for every $50 they spend, so purchase points at the entry tier return 10% of spend, before bonus points such as 30 for signing up and 70 for a birthday. Squatch Champion's 2 points per $1 doubles that. The reward cost lands only on points that are redeemed, and the minimum order on each reward means the discount always comes off an order of at least three times its value.

The repeat purchase it targets. The next order from someone who has already bought once. Points give that customer a balance that only has value at your store.

The emails that make members use it. Members only use points they know they have. Send a welcome email that shows the starting balance and the first reward within reach, a balance update after each order with the gap to the next reward, and a reminder when they have enough to redeem. Put the balance inside your post-purchase email flow so it arrives next to the order that earned it.

How do tiered loyalty programs work?

Tiers rank members by how much they've spent over a set period and give more to the higher ranks. Chubbies, the shorts and swimwear brand, runs a short version that's easy to follow.

Chubbies says its tiers "are based on your spending with Chubbies over a rolling 12-month period". Every member starts as a Weekend Amateur. Spending over $150 in the past 12 months makes you a Weekend Professional, and over $300 gets you to Weekend Hall of Famer. Members earn 1 point for every $1 spent, and points expire 12 months from the day they're earned.

Margin cost. Tier perks go to your best customers, so part of the cost can land on orders they'd have placed without the perk. Keep top tier perks to things that are cheap for you and valued by them, such as early access, and track gross profit per member alongside the number of members in each tier.

The repeat purchase it targets. The order that gets a customer over the next threshold, and the order that keeps them from dropping back when the 12 months roll over.

The emails that make members use it. A progress email with the spend left to the next level, a short note when they reach it, and a reminder before points or status expire. Chubbies' 12-month expiry gives you a clear date for it.

When does a paid membership make sense?

A paid membership works when customers order often enough that the fee pays for itself in savings. Thrive Market, the online grocery store, is built around one.

Thrive Market's membership page lists two plans: "$12/mo." billed monthly, or "$60 billed annually", which it shows as $5 a month. Members get "access to daily deals, exclusive products, and free full-size gifts on qualifying orders", and the page's pitch is to "Make Back the Annual Membership Fee in Savings".

Margin cost. The fee comes in before the perks go out, which is the reverse of points. The cost is the daily deals and the free gifts on qualifying orders, and the structure only holds up if the fee plus the extra orders covers them. If members don't order often enough to make the fee back, they have no reason to renew.

The repeat purchase it targets. Every order after the fee. A member who has paid upfront has a reason to bring the next order to you to get their money's worth.

The emails that make members use it. A running total of what the member has saved against what they paid, a renewal reminder that shows that total, and new member-only products as they arrive.

Paid memberships aren't part of Hayes Media's retention scope. If you sell something people reorder on a schedule, subscribe-and-save applies the same logic, and we build that.

Is subscribe-and-save a loyalty program?

In practice, yes. It rewards a customer for committing to the next order, and that commitment is the repeat purchase every other structure is chasing. Native, the deodorant and personal care brand, runs subscribe-and-save next to a points program.

Native's FAQ says it offers "a 25% discount to all products ranging from Deodorant to Shampoo" on subscription, and that subscribers can change scent, reschedule, or cancel anytime. Its rewards page links the two programs: 20 points for signing up for a subscription and 10 points for every 3 recurring subscription orders. It also gives 10 points each for signing up for emails and for texts.

Margin cost. The discount applies to every subscription order for as long as it runs. Native's 25% is more than the 10% that Dr. Squatch's entry-tier purchase points return. It pays when the order wouldn't have happened, or would have gone elsewhere, without the subscription. Set the discount from your gross margin rather than from what competitors offer. We go through how discounts move both sides of the ratio in how to improve LTV to CAC.

The repeat purchase it targets. The refill. Instead of deciding to reorder every time, the customer decides once. It only fits products with a predictable cycle.

The emails that make members use it. A reminder before each shipment with skip and swap options, a shipping confirmation, and a pause option when someone goes to cancel. You can send the pre-shipment reminder by text too, and our guide to SMS marketing for eCommerce covers where texts beat email.

Which loyalty program structure fits your store?

Match the structure to how often your customers already buy and how much margin each order carries.

Consumables on a regular cycle. Subscribe-and-save first, with points on top for one-off orders. Native's setup is that combination.

Products bought a few times a year. Points, with a minimum order on each reward so the discount comes off a real order.

A small group of heavy buyers. A short tier ladder that recognizes them, with perks that cost you little.

Frequent orders across a wide range. A paid membership can work here.

Products people buy once. Probably none of these. The section on when a loyalty program doesn't help explains why.

If you're setting up a Shopify loyalty program through an app, check two things before you choose one: that it can set a minimum order on each reward, and that it passes points balance and tier to your email and SMS platform so your flows can use them. Whatever you pick sits inside your wider retention marketing system.

What does a points program cost? A worked example

The numbers here are made up to show the mechanism. They're not client data and not a promise.

You sell a $40 product at 60% gross margin, so each order carries $24 of gross profit. You copy the Dr. Squatch entry rate: 1 point per $1, and 100 points for $10 off.

A customer places three orders, spends $120, and has 120 points. On the fourth order they redeem 100 points for $10 off. Across four orders you've made $96 of gross profit before the reward, and $86 after it.

Now the question that decides whether the program works. If that customer would have stopped after two orders without points, the program turned $48 of gross profit into $86 for a $10 reward. If they'd have placed all four orders anyway, the program cost you $10 for nothing. That's why you judge a loyalty program on repeat purchase rate and gross profit per customer, read by cohort, against customers who weren't in it.

When does a loyalty program not help?

Products people buy once. If a customer buys one sofa or one bike from you, points have nothing to be spent on.

A first order that disappoints. No reward fixes a late parcel or a product that underdelivers. Fix that first.

A program nobody hears about. If the only way to see a balance is to log in, members who never log in can't act on it, and you pay for the software anyway.

Margin you don't have. On a thin gross margin, a 25% subscription discount or a 10% points return can wipe out the profit on the repeat order it wins. Run the worked example on your own numbers first.

How does Hayes Media build loyalty programs?

Hayes Media builds loyalty programs as one part of its retention work for eCommerce brands, alongside email, SMS, and subscribe-and-save. We choose the structure from your order data, set the earn and redemption rules against your gross margin, and build the flows that show members what they've earned. Klaviyo is the platform on most of our accounts, and we've worked across most other email and SMS platforms, so a brand on something else is still a fit. We judge a program on lifetime gross profit to CAC: more members with less margin per customer isn't a win.

Our retention site, email.hayesmedia.co, shows "Trusted by 50+ eCom brands", "$500M+ Client revenue driven", and "8 yrs Retention expertise". It also shows one account reaching "0% to 59% of Revenue from Retention" with a "54% Returning Customer Rate". Hayes publishes those figures and the case studies behind them on its own site, and we have no third-party review profile or Klaviyo partner listing, so weigh them as our own account.

Our usual fit is a brand doing at least $100K per month in revenue, but that's a guideline, not a gate: a smaller brand with a clear budget set aside to scale and real order volume already qualifies. One-time email projects start from $2,000 USD, and retainers for ongoing full management start from $4,000 USD per month, scoped on the discovery call. The full scope is on our email and SMS service page.

If you want a second opinion on your program, or on whether you need one yet, we'll audit your repeat purchase rate cohort by cohort, what your current rewards and discounts cost you in margin, and which structure fits your purchase cycle. Book a discovery call. No onboarding fees. No lock-in contracts. No junior marketers.

Sources

Dr. Squatch, "Dr. Squatch Loyalty & Rewards": https://www.drsquatch.com/pages/loyalty-rewards

Chubbies, rewards page and FAQ: https://www.chubbiesshorts.com/pages/rewards

Thrive Market, membership page: https://thrivemarket.com/membership

Native, FAQ: https://www.nativecos.com/pages/faq

Native, "Native Rewards Program": https://www.nativecos.com/pages/rewards