Gamification: What It Means in Loyalty and What the Research Shows

By Alva Chew · Updated 2026-11-07

Definition Gamification is the use of game design elements, such as badges, streaks, levels and challenges, in a setting that is not a game. In a loyalty program it sits on top of the reward and asks customers to learn extra rules. The research finds effects that depend on context and users, and most of it comes from classrooms, not counters. A points program gives customers one rule to learn, which is why it is the simpler way to run gamification loyalty for a café or shop.

What is gamification?

Gamification is the use of game design elements in non-game contexts. That is the definition Deterding, Dixon, Khaled and Nacke proposed at the MindTrek conference in 2011, and later research still builds on it.

In loyalty, the non-game context is a purchase. The game elements are added around the reward so that buying feels like playing.

What game elements do loyalty programs use?

Element	How it works in a shop
Badges	A customer earns a badge for a first visit, a new menu item or a set number of orders
Streaks	Visits on consecutive days or weeks keep a streak alive
Levels	Customers move up named levels as they spend, similar to a tiered loyalty program
Challenges	A time-limited task, such as three different drinks in a month
Leaderboards	Customers are ranked against each other
Prize games	A spin-the-wheel or scratch card gives a random reward
Progress bars	A bar shows how far the customer is from a reward

Progress bars are the one element that needs no extra rule, because a stamp card or a points balance already shows the same thing.

Does gamification work?

The research says it depends. The studies below are the ones we could check at their original source.

Finding	Scope	Source
Gamification has positive effects, but the effects are greatly dependent on the context and on the users	Literature review of peer-reviewed empirical studies	Hamari, Koivisto and Sarsa, 2014
Effect sizes of g = .49 on cognitive, .36 on motivational and .25 on behavioural outcomes	Meta-analysis of gamified learning, with 19, 16 and 9 effect sizes	Sailer and Homner, 2020

Sources: Hamari, Koivisto and Sarsa, HICSS 2014. Sailer and Homner, Educational Psychology Review 32, 2020.

Sailer and Homner studied students and trainees, not people buying lunch. In their results the behavioural effect was the smallest of the three, and behaviour is what a loyalty program is meant to change. None of this shows that gamification fails in a café. It shows that the evidence for a small shop is thin.

What does gamification cost you?

There are two costs. The first is yours: every badge, streak and challenge needs rules, staff training and checking when a customer disputes it. The second is the customer’s attention.

A KPMG survey of more than 18,000 consumers in 20 countries in 2019 found that 60% said loyalty programmes were too hard to join or earn in. Source: KPMG via PR Newswire, 2019. The survey covers loyalty programmes in general, not gamified ones, but it shows how little spare attention customers give to rules.

Our guide to gamified loyalty programs goes through the costs in more detail.

How does a points program deliver the useful part of a game?

The part of a game that moves behaviour at a counter is visible progress toward a reward. A points balance does this with one rule: spend, earn, redeem.

Suppose a customer earns 2 points per US$1 and a free drink costs 90 points. A balance of 70 tells them they are 20 points away, which is about US$10 of spending. The earn rate is the only number they need to understand.

Badges and challenges ask for more. Before you add one, name the behaviour you want and check whether points can already produce it. Our page on the case for points only sets out the evidence on reward clarity.

How Gimify handles this

Gimify is points only, so it has no badges, streaks or games. Points follow the purchase amount, and members see their balance on a Google Wallet card.

Questions owners ask

What is gamification in a loyalty program?

It is the use of game design elements in a loyalty scheme. Common ones are badges, streaks, levels, weekly challenges, leaderboards and spin-the-wheel prizes. The customer earns something for playing, not only for buying.

Is gamification the same as a stamp card?

No, but they overlap. A stamp card is a simple progress mechanic, and progress bars are one of the game elements designers use. Gamification usually adds more layers, such as badges or challenges, on top of the reward.

Does gamification increase loyalty?

Sometimes. A review of peer-reviewed studies by Hamari, Koivisto and Sarsa concluded that effects are positive but greatly dependent on context. A meta-analysis of gamified learning found the smallest effect on behaviour. Little of this research was done in shops.

Can a points program give the same pull as a game?

Largely, yes. A visible balance such as 35 of 45 points shows progress toward a reward, which is the part of a game that matters most at a counter. It needs no badges or challenge rules.

What does gamification cost a small business?

Set-up and upkeep for every badge, challenge and prize, plus staff time explaining them. Customers also pay in attention, because each rule has to be noticed and remembered at the counter.