Restaurants have a CLV problem that discounts aren't going to fix

For the last ten years, the restaurant playbook for growing customer lifetime value (CLV) has been pretty much the same: bigger discount, faster. Drop a 20% off. Free side. BOGO. Repeat until the margin is gone.

That playbook is under real pressure now. Not because consumers stopped responding to value (they're actually more value conscious than they've ever been), but because we've pulled the same lever so many times the spring is gone. Discounts compress margin, train members to wait for the next promo, and most of the time, reward people who were going to order anyway.

Discounts don't grow CLV. At best, they move the timing of revenue you already had in the bag.  The brands that win the next loyalty cycle will be the ones activating member behavior through experiences that guests actually want to participate in. 

In this article, I want to make the case for why I think gaming as a rewards mechanic is the most overlooked CLV lever in restaurants today.

This article is by Anthony Gartung, Mistplay’s Senior Business Development Manager for Restaurants. 

👀 Related reading: LoyaltyPlay for brands and retailers

Where restaurant loyalty sits in 2026

Restaurant loyalty has an enrollment problem dressed up as an engagement problem.

The numbers are sobering when you actually look at them: 

• 56% of loyalty memberships are inactive
• Consumers belong to around 20 programs and actively use just half of them¹

With 67% of restaurants offer a loyalty program², and the average consumer signing up for 3.6 restaurant loyalty programs on average,³ the reality is that member participation and engagement is fragmented across all of them. 

When members do engage, the upside is real. Loyalty program members can generate up to 1.5x more spend, with redeemers generating up to 2.1x more spend. Engaged members spend more, visit more, and 86% actually tell more friends, which leads to a ripple effect driving new business growth.⁴ For restaurants specifically, the value is the same, with 83% of restaurant leaders with a loyalty program saying that it’s been successful in driving increased order size.⁵ 

The gap is obvious. A restaurant loyalty program drives serious CLV lift when members engage with it. The problem isn't acquiring members (operators are actually pretty great at that), but that more than half of your restaurant loyalty members go dormant, and the standard response of sending another discount doesn’t reactivate them. As Bond Loyalty’s 2026 report says, generic points and deals create false wins, meaning your program trains transactional behaviors while eroding the loyalty they were built to create. 

👀 Related reading: Breaking the mold: 7 of the best loyalty programs in action

3 reasons the discount lever has hit a wall for restaurant loyalty

Three things are squeezing the discount model at the same time, and most operators I talk to are feeling all three at once.

1. Margin compression: Food costs, labor costs, rent, and other costs have all gone up. Every point of menu margin you give back as a discount is one your finance team is going to ask about.
2. Discount fatigue: Members enrolled in 20 programs become adept at comparing offers, and the discount that might have lifted behavior in 2018 will no longer work. 
3. Attribution: When you discount someone who was going to come in anyway, you've spent money to subsidize an existing customer. CFOs in restaurant orgs are getting much sharper at asking what was actually incremental. The honest answer is usually less flattering than the report deck suggests.

Worth saying out loud: acquiring a new customer costs 5 to 25 times more⁶ than retaining one (this is widely documented across restaurant retention research), 60% of restaurant revenue is driven by repeat guests, and loyalty data shows that existing customers spend up to 67% more per order than first time guests. The economics of reactivating a dormant member are dramatically better than acquiring a new one. 

How gaming as a reward mechanic can move the engagement needle

Gamification, and specifically rewards earned through play, is doing what discounts have stopped doing. 

• When Smoothie King launched gamified experiences inside its Healthy Rewards program, it generated over 2 million game plays in the first three months and lifted loyalty signups by more than 40%⁸
• When Checkers & Rally’s promoted game-linked offers with LoyaltyPlay, they drove 54% guest re-engagement⁹
• And 76% of loyalty program owners plan to leverage gamified data collection in their programs within the next two years, with 7 out of 10 saying the benefits outweigh the costs 

So why does this work where discounting has stalled? A few things I think are happening.

1. Earned rewards beat given rewards. A discount tells the member "we'll pay you to come back." A reward earned through play tells the member "you earned this." Earned rewards redeem at materially higher rates, and the experience of earning the reward creates a memory the next campaign can build on. While behavioral economists have understood this for decades, restaurants finally can (and do) operationalize it.

2. Games also make your CRM stack work harder. The SMS, email, and push channels you already pay for have low open and engagement rates when they carry "10% off your next order." When they carry a play-and-earn moment, members actually open them. The reward is doing double duty, as it moves the visit and lifts the channel's performance.

Engaged members move both CLV inputs at once. CLV math has two real inputs: frequency of visit, and average order value. Discounts mostly pull on AOV in the wrong direction (smaller checks), but gaming-driven engagement lifts visit frequency without forcing margin compression on the menu. Additionally, engaged members tend to make larger, more confident purchase decisions when they actually get to the restaurant.

It also works on dormant members specifically. A member who hasn't opened your app in six months likely isn't getting reactivated by a 15% off email. An offer to earn through gaming (a habit they likely already have) is novel enough to break through, which is why operators are seeing up to 54% re-engagement from lapsed customers.

‍

What this looks like in practice

‍

‍

The power of gamification in loyalty programs is what Mistplay spent over ten years proving out, and is the basis we built LoyaltyPlay on. 

The mechanic is simple: 

1. A brand sends its existing loyalty members a game-linked offer through its own SMS, email, app, and push channels – powered by Mistplay's vast game network
2. The member plays the game 
3. The member earns a reward redeemable at the brand, while Mistplay funds the reward so the CLV lift doesn't come out of the menu margin

That last point is the one finance teams care about most. Most loyalty growth strategies ask the operator to spend more to lift CLV., while this one shifts the cost structure. The brand brings the audience and the channel, Mistplay funds the reward, and the traffic lift lands in the P&L without a corresponding margin hit.

👀 Related reading: Turning lapsed diners into regulars: Driving 54% re-engagement for Checkers & Rally’s with LoyaltyPlay

What comes next for restaurant guest loyalty

The next loyalty cycle in restaurants is going to be won by brands that figure out how to activate the audience they already paid to enroll. Turning the 56% of dormant members into engaged ones, making every SMS worth opening, and lifting CLV without compressing margin.

If you're a loyalty, marketing, or digital leader at a restaurant brand and any of this resonates with what your finance team is asking you for right now, contact us today to explore getting started with LoyaltyPlay for restaurants.

‍

‍

Sources: 

1. Bond Loyalty Report, 2026
2. National Restaurant Association, 2024
3. NRA, 2024
4. Bond Loyalty Report, 2026
5. Square’s Future of Restaurants Report, 2025
6. Restroworks, 2025
7. Olo, 2024
8. Businesswire, 2026
9. Mistplay, 2026

‍