- Brands that offer cash back on the signup popup instead of a discount end up with 10 to 20% higher first-order profit, because new customers place that first order without a discount.
- I'd rather customers claim cash back as store credit than as a gift card, so you're not paying out a gift card.
- Remind customers of the real value of their points or dollars, and trigger those reminders when they hit a threshold.
- Ask for referrals in every post-purchase flow, but time it by order count: later for newer customers, sooner from the third order on.
Which loyalty app do I use?
Fondue. I really like it for loyalty programs.
Fondue gives shoppers cash back on their purchase instead of a coupon code up front. Per its Shopify App Store listing, cash back works anywhere you'd use a coupon, including ads, onsite popups, email and SMS, and you can set whether a cash back promo can combine with your other promos.
On the Klaviyo side, Fondue puts its data into Klaviyo as tags, which you set up through the Fondue app itself. That's what lets you segment and trigger emails off loyalty activity in Klaviyo. Fondue's help center also has guides for using cash back inside Klaviyo, like adding a cash back offer to abandoned browse and cart flows with a custom tracking parameter on each email.
One thing to check when you set it up: which emails Fondue sends on its own and which ones you'll send from Klaviyo. Fondue's help articles don't spell that out, so look at the notifications in your Fondue admin before you build anything in Klaviyo. You want one email per moment, not two.
Why use cash back instead of a signup discount?
Because of what it does to the first order.
Here's what we see: brands that offer cash back on the signup popup instead of a discount end up with 10 to 20% higher first-order profit. A non-customer signs up, gets cash back on their first purchase instead of a percent off, and places that first order at full price. The reward comes after the order, and it pulls them back for the second one.
That's the part I like most for retention. A discount code gets used once and it's gone. Cash back sitting in their account is a reason to come back.
If you're still on a classic popup discount, I'd look at this before you test a bigger percentage. I go deeper on what discounts teach customers in email discount strategy.
How should customers claim their cash back?
I'd rather people claim it as store credit, not a gift card, because then you don't have to pay out a gift card. Store credit keeps the reward inside your store and points it straight at the next order.
Make claiming easy in the email. Say the amount in dollars and what it covers, then one button. Here's hypothetical copy to show the idea: "You've got $8 in cash back. That's most of your next bag." A specific amount beats a vague "you earned a reward!" every time.
Should cash back expire?
You can definitely add an expiration date to cash back. It adds urgency, and it helps.
Whether it's actually enforced is up to the brand. Either way, if there's a date, the emails should say it. "Your $10 in store credit expires Friday" is honest urgency, and it gives the reminder email a real reason to exist.
What should a loyalty reminder email say?
Remind customers of the actual value of their loyalty points or dollars. Points mean nothing on their own. "340 points" (a made-up number) needs a rules page. "$10 off your next order" doesn't.
The best way to time these is by threshold. If customers earn a point for every dollar spent, trigger a series when they hit a set threshold, like enough points for a meaningful reward. Don't only mention the balance inside the reorder email. A threshold series lands at the moment the reward becomes worth using, which is the moment they're most likely to act on it.
A simple threshold series:
- You hit it. They just crossed the threshold. Say what it's worth in dollars and what it buys.
- Here's how to use it. A reminder a few days later, with one button.
- Last call. If there's an expiry, a final reminder before it.
You can still mention the balance in the reorder reminder too. "Time to restock, and you've got $10 waiting" is a strong line. It just shouldn't be the only place the reward shows up. I cover the reorder side in how to increase customer lifetime value with email.
When should you ask for a referral?
In all the post-purchase flows, but timed by order count.
- Newer customers, one or two orders: wait a bit longer in the flow before asking. They're still getting to know the product, and you're asking them to vouch for it.
- Third and fourth-plus orders: ask sooner. That flow already has sharing emails in it, and you're much more familiar with those customers. They've shown you they like the product.
In the post-purchase flow I install, the path splits by order count, so this is easy to set up. Each path gets its own referral ask with its own delay. Here's how the later paths are laid out in when I send the review request email. If a review ask and a referral ask land in the same path, keep them in separate emails.
How should you reward referrals?
Typically, brands give a percentage of the referred order back as reward points, based on how much the friend spends. Sometimes it's points per dollar the friend spends, for example 2 or 3 points per dollar.
Either way, the referral email should make the reward easy to understand:
- Lead with what the friend gets. People feel better sharing a deal than asking a favor.
- Then what they get, in one line, in plain terms.
- Give them something to share, like their own link if your referral setup makes one.
- One button. Share it.
When a referral turns into an order, send a short thank-you that says what they earned.
What does this look like for a VIP customer?
Your best customers are already in the fourth-plus path and already getting the sharing emails. On top of that, I build VIP segments in Klaviyo by spend, with a threshold set per brand. When someone enters that segment, tell them what changed for them: first look at launches, first dibs on restocks. Your best customers already buy at full price, so lead with access, not a deeper discount. The full case is in how I build a VIP email segment.
How does cash back fit with your discount strategy?
Cash back is still a discount. It just lands after the order instead of before. That's easier on margin, but count it.
Cash back on an order, a campaign code and a winback offer on top can add up to stacked discounts nobody noticed. Fondue lets you set whether a cash back promo can combine with your other promos, so use that setting on purpose. A few rules I'd start with:
- Cash back pays off on the next order, not this one.
- Best-customer perks are access first, money second.
- Don't send a campaign discount to someone the same week their cash back lands.
FAQ
What emails should a loyalty program send?
At minimum: a reward earned email, a threshold reminder series when their balance is worth using, an expiry reminder if rewards expire, and a referral ask timed by order count.
Should loyalty emails come from the app or from Klaviyo?
Check what your loyalty app sends on its own first. With Fondue, data comes into Klaviyo as tags, so you can build the emails there. The rule is one email per moment, so turn one off if both would send.
Should loyalty rewards expire?
You can add an expiration date. It adds urgency and helps. Whether it's strictly enforced is up to the brand, but if there's a date, put it in the email.
When should I ask customers for a referral?
In every post-purchase path, timed by order count. Wait longer for customers with one or two orders. Ask sooner from the third order on.
Is cash back better than a welcome discount?
In what we see, brands that put cash back on the signup popup instead of a discount get 10 to 20% higher first-order profit, because the first order happens at full price.
Founder of Bardown Digital, a Chicago-based Klaviyo email and retention agency for Shopify brands. He's worked with brands doing $500K to $100M a year, with $100M+ in email-attributed revenue across them.