Blog Post

Square targets punch cards with new loyalty rewards

Square, the mobile payment acceptance tool, is getting a lot more useful for merchants with version 2.2, which brings loyalty rewards for Square Card Case users, hardware integration with cash drawers and receipt printers and more back-end tools. The new app, which is debuting Tuesday on iOS (s aapl) and Android (s goog), continues the momentum for Square, which is now up to 800,000 customers using the app since launching last year.

With Square 2.2, merchants who integrate with Square’s mobile wallet app Card Case, will be able to now identify and reward loyal users. They can set rewards based on a number of visits or a total amount spent at the business, and when the customer reaches that mark, the merchant can apply a discount to their purchase. It could be something like a 50 percent off discount or a free item. Merchants can tell a customer of the deal when they order and the discount will be noted in a user’s Card Case app.

I just talked with Megan Quinn, Square’s director of products earlier this month about the hands-free payments for Card Case users and I mentioned that there still needed to be a way to reward regular users. Little did I know Square was working on that feature. Quinn said it’s all part of trying to improve the experience between merchant and customers, to turn their interactions into less of a transaction and more of a conversation that builds loyalty over time.

“Meaningful sustained loyalty happens when people visit places where they have a great experience and feel comfortable. We want to turn customers who walk in once into someone who walks in every day,” Quinn said.

This underscores what Square founder Jack Dorsey said at GigaOM’s Roadmap conference last week about how technology tools like Square can highlight and strengthen our humanity by creating more face-to-face interactions. Unfortunately, users aren’t able to track their progress toward a reward on their Card Case app. That seems like a missed opportunity to really displace loyalty punch cards, which not only reward visits but encourage more of them as you close in on your next reward. I’m sure future versions of Card Case will include something like this.

The other improvements in 2.2 include the ability for Square to connect wirelessly to certain cash drawers and receipt printers. So far Square merchants have been giving out email or text receipts, but this will allow them to hand out physical receipts for customers that want it. It also helps Square work better in an existing business that uses certain cash drawers. Square will work initially with the Star Micronics receipt printer and the APG cash drawer Vasario Series.

And 2.2 also offers the ability to better track sales history, resend receipts, and provide refunds. There’s also a new feature that lets merchants customize their tip percentage options.

I like the updates to Square, both in this release and with the earlier improvements to Card Case. It shows that Square is really trying to innovate on both the consumer and merchant side. And it’s emphasizing really frictionless interactions and building consumer loyalty, which I think is key for merchants. People want more value and features but they really don’t want it to bog down their experience. I wish more merchants were accepting Card Case and perhaps with loyalty rewards, they might get into it. But overall, the latest updates show that Square is building out a more robust platform for businesses to work off of. The Square system still appeals mostly to smaller merchants, but as Square adds more features, it’s able to dream about moving on to bigger businesses.