Free product rewards double repeat purchase rates. Here’s how.

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Hey all,

Most loyalty programs promise to increase retention.

But which features actually deliver?

To find out, we partnered with Stamped to pull real-world data from brands successfully executing loyalty programs – not just experimenting.

In their latest Loyalty Benchmark Report, Stamped reviewed over $5 million in returning customer transactions across 1,000+ brands in CPG, fashion, wellness, and more.

One insight stood out: free product rewards are the most effective way to drive repeat purchases within a loyalty program.

In today’s insight, we’ll break down how free product rewards drove a 2x repurchase rate within 90 days.

Let’s go!

Read time: 1.5 minutes

🎯 FEATURED INSIGHT

Free product rewards doubled repurchase rates within 90 days when offered as part of a customer loyalty program.

Most brands approach loyalty programs with the usual suspects: points, discounts, and store credit.

But not every reward drives the same impact.

One stood out in the data as driving the most impact: free product rewards.

Here’s what we found:

• 64.2% of customers who redeemed free products bought again within 90 days compared to 34.7% who didn’t.

• 25% of those customers repurchased the exact same item.

• Free gifts outperformed discounts, store credit, and points-based offers in long-term value (when offered as part of a loyalty program).

Free product rewards don’t just boost loyalty. They drive actual behavior change.

Unlike dollar-off discounts or store credit, which often lift AOV in the short term, free products encourage trial, deepen product usage, and increase the likelihood of repeat purchases.

They’re not just a nice gesture. They’re a catalyst for habit formation.

Take Lilac St., a beauty brand using Stamped, as an example.

They offered a free product reward to returning customers.

Customers who redeemed the giveaway product returned within 90 days 65% of the time compared to 54% for those who didn’t.

Even without a full 2x lift, a 20% increase in returning customer orders drove measurable impact.

And while AOV and basket size were slightly lower, the strategy was cashflow positive thanks to the retention lift and long-term customer value.

⭐ Takeaway: If you run a loyalty program, test a free product reward. It may drive more repeat purchases than any other incentive.

That's all for today.

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Until next time.

— Allen