Customer Loyalty Programs & Common Mistakes Dispensaries Should Avoid

In this blog, we’ll be chatting about customer loyalty programs and common mistakes. A loyalty program can be one of your dispensary’s most powerful tools—when it’s done right. But after auditing loyalty programs across nearly every legal cannabis rec market, we’ve seen firsthand how easy it is to fall into traps that hurt your performance, confuse your customers, and leave serious revenue on the table.

If your loyalty system is set up and running but you’re not seeing the engagement, redemptions, or ROI you expected, chances are you’ve got one (or more) of these common missteps in play.

Let’s break them down—along with how to fix them.

Mistake #1: Awarding Points Post-Tax

We’ll start with a big one—and it’s more common than you think.

Awarding loyalty points on the post-tax total is like paying tax twice.
Once to Uncle Sam, and again to your customers in the form of over-inflated points.

When you calculate loyalty points based on the post-tax amount, you’re not only giving away more than necessary—you’re inflating the perceived value of purchases and distorting your own financials. For example, in a state with a 30%+ tax rate, you’re essentially rewarding a $70 purchase like it’s $100.

The fix:
Configure your Alpine IQ setup to calculate points based on the pre-tax subtotal. It’s a simple switch—but a critical one for maintaining a sustainable and fair loyalty system.

Mistake #2: No Expiration Date on Points

We get it—you want your customers to keep earning. But without an expiration window, points just sit.

Over time, that leads to bloated point balances, redemptions you can’t predict, and missed opportunities for re-engagement. Even worse, customers may never come back to redeem at all because they never feel urgency.

Points without expiration don’t drive behavior—they just collect dust.

The fix:
Set a clear expiration window for unused points.

180 days is a great default—it’s short enough to spark redemptions but long enough to feel flexible. If your customer base is more loyal or purchases on longer cycles, 365 days can also work.

Bonus: Point expiration gives you another reason to reconnect with lapsed customers—with messaging like “You’ve got 5,000 points expiring soon!”

Mistake #3: Overcomplicating the Reward Structure

We’ve seen loyalty programs with 10+ reward levels, each with different point requirements, product exclusions, and redemption rules.

That’s not a reward system—it’s a math problem.

Too many reward levels create confusion. Not just for customers, but for staff too. When nobody can quickly explain how the program works, people disengage. Customers stop tracking their points, and budtenders stop pushing the program.

The fix:
Keep it simple and clean. Stick to 3–5 tiers of rewards.
Offer meaningful but easy-to-understand options. Think:

• 500 points = $5 off
• 1000 points = free pre-roll
• 2000 points = $20 store credit

Make your rewards clear, visible, and easy to redeem. Clarity = confidence = more redemptions.

Mistake #4: Only Using Promotions to Stay in Touch

Your loyalty program shouldn’t only exist when you have a sale to push.

Many dispensaries run promo-heavy campaigns and forget to nurture the relationship between those moments. When you only show up with discounts, customers start to expect them—and may only shop when there’s a deal.

Even worse, they stop feeling personally connected to your brand.

The fix:
Introduce lifecycle-based touchpoints. These are automated, personalized communications sent based on each customer’s behavior or milestones—not your marketing calendar.

Examples include:

• A welcome message after their first visit
• A reward when they hit their 3rd or 5th purchase
• A check-in after 60 days of inactivity
• A celebration on their loyalty anniversary
• A thank you message when they reach a new reward tier

These messages are highly relevant and often generate 2–5x better engagement than generic promos. They feel like part of a relationship, not a sales push.

And they can all be built and automated within Alpine IQ.

What These Mistakes All Have in Common

They seem small.
They’re easy to overlook.
But over time, they chip away at the power of your loyalty program.

The truth? These mistakes cost you sales.
They dilute your program’s value, confuse your customers, and lower the likelihood of re-engagement.

The good news? Every single one of them is fixable—quickly. We hope you found some actionable tasks to take in order to avoid customer loyalty programs common mistakes.

How ESBE Helps You Avoid These Loyalty Pitfalls

We specialize in full-spectrum loyalty management for dispensaries using Alpine IQ. That means we don’t just help you launch—we help you get it right and keep it optimized.

What we bring to the table:

✅ Strategic reward structuring (no more overcomplicated tiers)
✅ Point policy setup (pre-tax, with smart expiration windows)
✅ Automated lifecycle campaigns (beyond promotions)
✅ Ongoing reporting + optimization
✅ Staff training materials and internal adoption strategies

We’ve worked with multi-store operations, single-location shops, and brand-new openings—and we’ve seen what works.

If you’re already running a loyalty program and want a second set of eyes, or you’re starting from scratch and want to skip the rookie mistakes, we’re ready to help.

📲 Connect with us here and let’s build (or fix) a loyalty program that actually drives revenue—and doesn’t waste your time or money.

TL;DR
If your loyalty program feels messy, hard to manage, or like it’s not moving the needle… it probably isn’t.

But that’s fixable.
And the payoff? Higher engagement. Smarter campaigns. Better ROI.
Let’s get your loyalty program dialed in—properly.