5 reasons why your ecommerce loyalty program isn’t working (and what to do instead)

Loyalty programs promise a lot: more repeat purchases, stronger engagement, and a clear path to higher customer lifetime value (LTV). But for many Shopify Plus brands, the reality doesn’t match the expectation. 

You invest in the software, set up the rewards, launch with excitement, and then… nothing. Customers ignore it. Perks go unused. And ROI flatlines.

The issue isn’t loyalty programs themselves. It’s how they’re designed, delivered, and managed. This blog breaks down 5 common reasons your ecommerce loyalty program might be underperforming and how to fix each one.

Top 5 reasons why e-commerce loyalty programs fail [and how to fix them]

Here are some of the most common reasons why your e-commerce loyalty program doesn’t work and how to fix them. 

1. Clunky redemption UX

You might think your loyalty program is generous. But if customers have to jump through hoops to claim a reward, they won’t bother.

This can look like: 

• Login requirements 
• Copying codes
• Switching tabs 
• Unclear instructions
• Clunky interfaces. 

All these small inconveniences stack up and create a frustrating experience.

And when customers feel frustrated, they disengage. Rewards go unredeemed, and your program quietly becomes irrelevant.

Fix it with seamless, embedded rewards

Make redemption frictionless. Integrate rewards into the checkout flow so customers never have to switch tabs or hunt for a discount code.

One-click OTP logins instead of passwords can eliminate barriers. Even better, automatically apply rewards at checkout based on cart value and point balance. The smoother the experience, the higher the redemption rate.

2. Cookie-Cutter tiers and perks

Many Shopify brands fall into the trap of copying popular loyalty frameworks, resulting in programs that feel bland, generic, and uninspired. 

For example, you might be offering the same rewards to high-AOV customers who shop once a month and low-AOV customers who only shop during sales.

So you might end up rewarding coupon chasers or serial returners more than long-term brand advocates. 

Without a nuanced understanding of customer data, you can’t prioritize the segments that drive margin. 

Solve this by making your tiers data-driven and brand-aligned

Look at your actual customer behavior. Segment by frequency, AOV, and lifetime value to design tiers that reflect real patterns. 

For instance, if 30% of your beauty customers reorder every 6 weeks, build a tier that acknowledges that loyalty. Tailor perks and thresholds to encourage margin-positive behaviors, not just activity.

3. Generic, forgettable rewards

Too many brands offer discounts and call it a day. But these days, everyone offers discounts. Customers are constantly bombarded with 10% off codes and seasonal sales. 

So when your loyalty reward is just another small percentage off, it blends into the background. 

• Shoppers don’t feel rewarded; they feel like they’re getting what every other store already hands out for free. 
• Discounts don’t create emotional connection or long-term differentiation.
• Customers forget them as quickly as they see them.

Plus, rewards that lack uniqueness do nothing to reinforce brand loyalty. If your perks are interchangeable with any other store’s offers, why should a shopper stick with you? 

Here’s how you can fix this: 

Go beyond discounts. Offer early access to bestsellers, store credit, exclusive drops, or VIP-only content. Think: free styling sessions, private events, or member-only gifts. Align perks with how your customers live and shop. Real value beats shallow savings every time.

4. Confusing communication

Miscommunication is one of the most common killers of loyalty program success.

• Points balances aren’t visible. 
• Redemption instructions are buried in emails. 
• Tier milestones aren’t clearly defined. 

All of this adds up to customer confusion. 

Because if a customer earns 100 points, what does that actually mean? If the value of a point isn’t obvious, or if rewards don’t clearly match effort, shoppers lose interest. 

Customers want simplicity. They want to know what they’ve earned, what they can get, and what steps to take. When messaging is vague or inconsistent, it leads to uncertainty. And uncertain customers don’t act.

Fix it with automated, educational communication

Use lifecycle email and SMS to communicate points, perks, and progress. Set up automated flows that tell customers what they’ve earned, how close they are to a new tier, or what reward they can use right now. Reinforce value at every step with personalized, plain-language updates. 

For example, instead of abstract numbers, spell them out: 

“Earn $10 store credit” is clearer than “Get 100 points.” 

Use visuals like progress bars or side-by-side comparisons so customers understand the real value of their rewards at a glance. The clearer the value, the more likely they’ll engage.

5. Undefined goals and one-dimensional engagement

Most programs track only purchases and points, but don’t define clear objectives, like boosting referrals, increasing frequency, or driving non‑purchase behaviors. This narrow focus limits how customers engage.

Fix it by setting multidimensional goals and engagement paths

• Define specific KPIs (e.g., referral rate, social shares, reviews) tied to different behaviors.
• Incentivize non‑transactional actions like referrals, UGC, surveys, or community participation.
• Launch new engagement paths over time, like welcome gifts or surprise bonus points, so your program stays dynamic 

This approach builds a deeper connection and keeps the program fresh, not just transactional.

But even when you know what to fix, putting it all into action is another story. 

You need deep customer data to build accurate tiers, design rewards that match your brand and margin goals, integrate tech that works across platforms, and ensure your team can manage it all without turning loyalty into a full-time job.

That’s where we help Shopify brands like yours. 

Avoid loyalty program mistakes with Subscribfy 

Subscribfy is the all-in-one retention platform built for Shopify Plus brands. We help you:

• Create frictionless UX: Subscribfy eliminates login struggles with OTP access and ties directly into your native Shopify Plus checkout, removing unnecessary steps and making rewards feel effortless to use.
• Data-driven tier design: Most brands guess their way through tier creation. We don’t. Our team analyzes your actual customer behavior—AOV, frequency, purchase patterns—to build tiers that reflect real loyalty.
• Strategy and benchmarking: With benchmarking from hundreds of Shopify Plus brands and by looking at your data and helping you to design a survey, we help you pick rewards that align with your brand. This includes exclusive access, store credit, loyalty-first product launches, or a combination of these.
• End-to-end communication: We integrate directly with Klaviyo, Mailchimp, Attentive, Yotpo Email, and Postscript, automating engagement so no perk gets forgotten.
• Message clarity: From on-site banners to loyalty emails, we make sure every message is clear, on-brand, and persuasive. Your customers should always know what they’ve earned, what’s next, and why it’s worth sticking around.

So if your loyalty program is costing more than it’s delivering, it’s time to rethink how you approach retention.

Book a demo to see how Subscribfy helps Shopify Plus brands turn loyalty into long-term growth.