Loyalty Program ROI Calculator

Buy 10 Get 1 Free Is Really a 9.1% Discount

Most business owners don't realize this: "buy 10 get 1 free" means the customer gets 11 items for the price of 10. The effective discount is 1/11 = 9.09%, not 10%. That's an important distinction when calculating your true cost.

The formula is simple: Effective Discount = 1 ÷ (threshold + 1) × 100. The "+1" accounts for the free item itself.

Buy X Get 1 Free — Effective Discount Table

The Real Value: Increased Visit Frequency

Research shows loyalty programs increase visit frequency by 20-35%. A customer who visits 3 times per month might visit 4 times with a loyalty card. That extra visit more than covers the 9% discount.

The "almost there" effect: Customers visit more often as they approach the reward. When someone has 8 out of 10 stamps, they'll go out of their way to reach the goal — even choosing your shop over a competitor. This psychological pull is the real engine of loyalty programs.

Tip: Set the Right Threshold

The sweet spot for most small businesses is buy 8-12 get 1 free. Below 6 is too generous (over 14% discount). Above 15 feels unattainable and customers lose interest before completing the card. Match your threshold to your average customer visit frequency — the reward should feel achievable within 2-3 months.