If you run an online store, chances are you’ve wrestled with this question:
Should I use loyalty rewards or just offer discounts?
Both are popular. Both seem to work. But they send very different signals to your customers.
And if your goal is long-term growth, not just a quick spike in sales, then how you answer this really matters.
Let’s break it down the way real merchants think about it.
Discounts Feel Good, But They Don’t Always Stick
Discounts are easy.
A code pops up. People use it. Revenue ticks up.
But here’s the catch:
Discounts train customers to only buy when there’s a bargain.
Spend a few months with discount promos … and what do buyers start asking for?
More discounts.
Suddenly, full-price sales feel like a struggle.
Discount fatigue sets in.
Profit margins shrink.
That’s why discount-led growth often feels fast at first — then flat.
It’s like an energy drink for your store. Quick boost. Then crash.
And the bigger problem?
You’re attracting customers who may not care about your brand.
They care about price.
They’ll buy if it’s cheap.
They’ll disappear when it isn’t.
That’s not loyalty.
That’s opportunism.
Loyalty Programs Change the Customer Relationship
Loyalty doesn’t give away value. It builds it.
When you don’t just hand out a code and say, “Use it,” but actually tell people, “Hey, we appreciate you and want you here,” things shift.
Suddenly, people buy because they’re chasing points, not just looking for a quick discount.
They come back more often since they feel recognized for sticking with you.
Your brand starts to pop into their minds first, not just when they’re hunting for deals.
And honestly, they begin to feel like they belong. Not just another sale, but part of something, members, not just customers.
Over time, that emotional loyalty becomes revenue that is consistent and more predictable.
That’s the opposite of discount hunting.
So Which One Actually Drives Long-Term Growth?
Here’s the real answer:
Discounts are great for short terms.
Loyalty programs are great for lasting relationships.
If you want to boost sales this weekend, a discount can help.
If you want customers to come back every month, loyalty is better.
The difference is subtle but powerful:
- Discounts reward a single transaction.
- Loyalty rewards ongoing engagement.
Read: 5 Best Loyalty Strategies for Shopify Merchants in 2026
A Simple Example to Think About
Imagine two customers:
- Customer A
Buys only when there’s 20% off.
They’re gone as soon as the price returns to normal.
- Customer B
Earns points with every purchase.
They redeem perks. They check your store regularly.
They even tell friends because they feel valued.
Which customer holds more lifetime value?
Which one is more likely to stick with you through ups and downs?
The answer is pretty clear.
But What About Combining Both?
You don’t have to choose one forever.
Many smart brands start with occasional discounts to bring in trial customers.
Then they shift the focus to loyalty once people understand the value of staying engaged.
Here’s how that usually works:
1.First purchase discount — a Kickstarter.
2.Introduce loyalty points — reward the next steps.
3.Exclusive member perks — build emotional connection.
4.Tiered rewards — keep people leveling up.
What Matters Most
It isn’t loyalty vs discounts.
It’s understanding what kind of customers you need.
Do you want buyers who return again and again because they feel connected to your brand?
Or buyers who only care about the next code?
If your goal truly is long-term growth, loyalty programs win.
They build habits.
They build preference.
They build something that discounts alone never build: value perception tied to your brand.
