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Loyalty programs are an essential part of businesses’ efforts to retain customers and increase engagement. However, as we move into the era of Web 3.0, there is an opportunity to revolutionize these programs and make them even more engaging and valuable for customers. Enter NFTs.

Why Loyalty Programs Need to Evolve

As loyalty programs are becoming more and more popular, each customer is likely to be a member of multiple loyalty programs. A study by Bond Brand Loyalty showed that the average consumer is enrolled in 14.8 loyalty programs but is only active in 6.7 of them. The same study revealed that less than 30% of members are very satisfied with the level of personalization of the channels of communication and messages they were receiving.

So in order to really achieve the desired result of growing the customer lifetime value and inspiring their continued loyalty, modern loyalty programs need to evolve to better serve customer interests.

At the same time, there are great rewards for businesses that successfully improve their loyalty programs. Loyalty leaders grow revenues about 2.5X as fast as other companies in their industries. Achieving just a 5% increase in customer retention can lead to 25%-95% increase in profit.

What are NFTs Exactly?

NFTs, or non-fungible tokens, are a type of digital asset that exists on a blockchain. They are unique, verifiable and cannot be replicated. Unlike traditional digital assets such as a digital music file, which can be copied and shared, NFTs are one-of-a-kind and have a unique digital signature that is stored on a blockchain. This makes them a perfect match to represent digital collectible items such as virtual trading cards, digital art, virtual real estate, virtual clothing and more.

NFTs are created using smart contracts, which are self-executing contracts with the terms of the agreement written directly into the code. These smart contracts can be used to create, manage and transfer ownership of NFTs on a blockchain. Thus, NFTs can be bought, sold and traded on digital marketplaces. They allow for true digital ownership and scarcity of digital assets, and also have the potential to have real-world value.

Advantages of NFTs for Loyalty Programs

Loyalty programs based on NFTs have the potential to be superior to regular loyalty programs in these six ways:

  1. Unique and exclusive rewards: NFTs can be used to create unique and exclusive digital assets that are one-of-a-kind and can’t be replicated. This can create a sense of exclusivity and prestige for customers who earn or purchase these rewards, making them more desirable and valuable.
  2. Real-world value: A utility NFT could grant the holder discounts, early access to products, exclusive merchandise or other tangible benefits. Combined with the tradability feature, this means that customers who earn or purchase NFT rewards can potentially benefit from resale, making the rewards more valuable and attractive.
  3. Increased engagement: NFTs can be used to create interactive and engaging customer loyalty experiences. For example, customers can show off their exclusive NFT rewards to friends and other users. This can create a sense of community and belonging among customers and increase engagement with the brand.
  4. Greater transparency: Being built on blockchain technology, NFTs are unique, verifiable and can’t be replicated. This makes them more transparent and secure than regular loyalty programs, where rewards could be replicated or modified.
  5. Personalization: NFTs can be used to create rewards and experiences that can be tailored to different customers based on their preferences, behaviors or demographics.
  6. Interoperability: With NFTs, brands can easily collaborate with each other without the hassle of integrating their backend systems. For example, a customer may earn loyalty tokens from multiple businesses and then use those tokens to redeem rewards at any participating business. NFTs enable this interoperability because they are based on open standards and can be easily transferred and tracked on a blockchain network.

Examples of Retailers Using NFTs for Customer Loyalty

Starbucks Odyssey
Perhaps the most famous example of a brand using Web3 technology for its loyalty program is Starbucks. An extension of Starbucks rewards, Starbucks Odyssey gives customers the opportunity to participate in interactive activities known as “Journeys” and earn NFTs as incentives through the experience.

“We are leveraging Web3 technology to reward and connect with our members in new ways, such as offering collectible, ownable digital stamps, a new digital community, and opening access to new benefits and immersive coffee experiences — both physically and digitally,” said Brady Brewer, EVP and Chief Marketing Officer at Starbucks.

In March 2023, Starbucks released its first paid collection of NFTs, selling all 2,000 Siren items in just 18 minutes.

Scotch & Soda
Dutch fashion brand Scotch & Soda launched ‘Club Soda 3.0’ in September 2022, a Web3-powered loyalty program. It uses NFTs to reward users with exclusive experiences, events and offers from the brand. Users can mint, manage and sell their digital art on a sustainable platform created through Salesforce NFT Cloud. The brand’s NFTs, minted on the Polygon blockchain, allow members to join the Web3 community through their public cryptocurrency wallet address. The initiative builds on the success of the brand’s loyalty program debut, Club Soda, and allows members to collaborate with the brand on special initiatives, promoting inclusivity in the digital world. Scotch & Soda sees this as the first step in building a community in Web3 that is centered around the free spirit values of Amsterdam, giving everyone a sense of ownership in the process.

Soapy Joe’s Car Wash
Soapy Joe’s, a car wash company in San Diego, launched an NFT campaign in July 2022 that allows customers to collect Ethereum-based NFTs from each of its 17 locations. The more NFTs a customer collects, the more rewards are unlocked, such as physical keychains, hats and even amusement park tickets.

Since the promotion began, customers have minted more than 10,000 NFTs from approximately 2,000 wallets. Soapy Joe’s has also seen a 10% increase in web users since the start of the promotion and a significant increase in customers visiting more than four locations. The NFTs are based on the design of air fresheners given out by the car wash and have become a cult collectible among the company’s loyal “Soapy Squad.” Soapy Joe’s plans to build on its digital collectible strategy in the coming months.

Despite the competition from larger companies, Soapy Joe’s smaller-scale NFT campaign has yielded impressive results, with high customer engagement and an increase in web traffic. The company plans to continue exploring NFTs as a part of its digital collectible strategy, with future plans yet to be announced. The campaign has been inspired by Ellen DeGeneres’ NFT segment featuring a “stick cat” image, and the NFTs are designed based on the company’s air fresheners, which have become a popular collectible among customers.

Final Remarks

Innovative businesses have shown that NFTs can offer new opportunities for growth and drive customer loyalty. To succeed in using NFTs, brands must focus on building engagement and community while also understanding how to create successful NFT projects.


As refive‘s CEO and Co-founder, Mitul Jain relies on more than a decade of experience working in the application of AI and data to drive customer value. Having worked on these challenges across financial services, telecommunications and retail sectors, he founded refive to solve brick-and-mortar retail’s biggest challenge — a lack of understanding of in-store customers. Prior to refive Jain built the first open banking-based customer engagement platform at OptioPay. He’s a member of the 2Hearts Foundation, supporting fellow immigrants in business, and a passionate Web3 evangelist.