A tiered points program already runs on two game parts: a score and a level. Gamification adds the rest. It gives members goals that sit closer than the next reward, so there is a reason to act this week. The test for each mechanic is the same. Did it change what members bought, or did it pay for what they would have done anyway?
What is gamification?
The widely cited definition comes from a 2011 paper by Sebastian Deterding and three co-authors. It says gamification is “the use of game design elements in non-game contexts” (Deterding et al., 2011). Put simply, a gamified service borrows parts of games. It does not turn into a game.
Loyalty programs used those parts before the word caught on. Airline miles and coffee stamp cards ran on progress toward a reward long before anyone called it a game. The new part is the layer of shorter goals that sit between one reward and the next.
Which game mechanics do loyalty programs use?
Challenges set short goals on top of the earn rules. Sephora asks Beauty Insider members to join a Challenge before any task counts. It pays points for each task, plus 100 extra points when a member finishes them all (Sephora). Chipotle runs Extras, which pair challenges with bonus points and collectible badges (Chipotle Rewards). Its terms name digital achievement badges as one of the things a challenge can pay (Chipotle Rewards Terms).
Tiers turn spend into a level to reach and keep. Starbucks Rewards has three levels. Green members earn 1 Star per $1, Gold members earn 1.2 and Reserve members earn 1.7. A Gold member who earns fewer than 500 new Stars in the 12 months after reaching Gold goes back to Green (Starbucks Rewards Terms).
Instant wins borrow from sweepstakes. All play in the 2026 Monopoly game at McDonald’s runs through the McDonald’s app. Prizes include instant-win food and 1,500 to 7,000 MyMcDonald’s Rewards points. Players must opt in to Rewards first, and the stated odds of winning are 1 in 5, mostly food prizes (McDonald’s).
Each mechanic sets a different goal, and each one fails in its own way. The last column names the number that shows whether it worked.
| Mechanic | Goal it sets | How it breaks | Metric that settles it |
|---|---|---|---|
| Challenge | Finish a short task list before a deadline | Pays for trips the member had planned anyway | Extra trips against a random holdout |
| Badge | Collect a mark for an achievement | Nothing rides on it, so members stop looking | Repeat rate after the badge lands |
| Tier | Earn enough in a year to reach or keep a level | The drop to a lower level reads as a loss | Retention of members who just missed the bar |
| Instant win | Buy now for a chance at a prize | Prize hunters open a second account | Accounts per person and plays per day |
| Streak | Act every day or week without a gap | Members do the least that keeps the count alive | Spend per active day, not count of days |
| Progress bar | Close the gap to the next reward | Effort drops once the reward is paid | Days to the next purchase after a reward |
| Leaderboard | Beat other members on a ranked list | Members far from the top stop trying | Activity by rank band, top to bottom |
Why do game mechanics change what members do?
The field evidence from real reward programs centers on the goal-gradient effect. Ran Kivetz, Oleg Urminsky and Yuhuang Zheng tested it in the Journal of Marketing Research in 2006. The old finding from animal studies is that effort rises as a reward gets closer (Kivetz, Urminsky and Zheng, 2006).
One of their tests had nothing to do with buying. Members of a music site called Jaboom earned a $25 Amazon certificate for rating 51 songs. The data covered 148 members who rated 14,866 songs. As members got closer to the certificate, they came back sooner and rated more songs per visit (Kivetz et al.).
That is the case for challenges and progress bars. Show the member how close the reward is, and effort climbs near the end. The study also found the reverse. Members who sped up toward the goal were more likely to stay, and members who slowed down were more likely to quit (Kivetz et al.). The café and car-wash studies behind stamp cards are covered under punch card.
Where does gamification fail?
The research backs it, with a catch. A 2014 review of published studies found positive effects. It also found those effects are “greatly dependent on the context” and on the users (Hamari, Koivisto and Sarsa, 2014).
Streaks show the sharpest failure. In May 2016, GitHub removed the streak counters from developer profiles without notice. A 2021 study used the change as a natural experiment. Near the end of streaks of 60 days or more, over 40% of days had a single contribution before the change. After it, the share fell to about 36% (Moldon, Strohmaier and Wachs).
The counter was buying the smallest act that kept the count alive. A loyalty streak built on app opens will buy app opens. Tie the streak to a purchase or a qualifying visit, and let members repair one missed day.
A reward also resets effort. In the Kivetz café data, buying slowed after the first free coffee and then sped up toward the second (Kivetz et al.). Put the next goal on screen at the moment the badge or reward lands.
Mechanics that pay value draw abuse, so live programs cap them. McDonald’s caps Monopoly at 8 game piece entries a day and one app account per person (McDonald’s). Chipotle can suspend a member who holds more than one Rewards account (Chipotle Rewards Terms). Sephora lets members keep challenge points after they return the item that finished a task (Sephora). A team that copies that rule has to price returns into the challenge.
How do you measure gamification in a loyalty program?
Most challenges need an opt-in, and that sets a trap. Sephora counts a task only after the member has joined the Challenge (Sephora). Joining is a choice, so joiners are a self-selected group. Compare them with everyone else and the challenge gets credit for who joined.
The fix is a random holdout chosen before launch. Pick eligible members at random and leave them out of the offer. Then compare everyone offered, joiners and non-joiners together, with the holdout. Control group testing covers the setup. Our guide to gamification software adds per-mechanic reporting to the checklist for any platform.
For illustration, a coffee chain offers 100,000 members a challenge. Three visits in 14 days earns 300 bonus points worth $3. A random 10,000 eligible members get no offer. Of those offered, 30,000 finish, so the bonus costs $90,000. The offered group averages 2.6 visits in the window, against 2.3 for the holdout.
That gap is 0.3 visits across 100,000 members, or 30,000 extra visits. At $4.20 of gross margin a visit, the extra visits earn $126,000. After the $90,000 bonus, the challenge clears $36,000, at $3.00 per extra visit. A report of finishers against non-finishers would show a far bigger gap, because regulars finish more often.
How GRAVTY handles gamification
One GRAVTY patent covers Multi-Dimensional Behavior Tracking, a patented approach to generating first-party data. It is US 11,360,748. The GRAVTY technology page ties that patent to “innovative game mechanics.” The rules run on Visual Rules, a patented no-code rules engine. In the words of the same page, “Patented Visual Rules let business teams change program logic”. A challenge window is program logic. So is a streak rule. The team that owns the mechanic can change it.
Mechanics that pay out value need fraud controls. GRAVTY AI-Trust uses machine-learning models to flag anomalous earn and redemption behavior as it happens. Its scoring models are customizable per program, so the thresholds can match what the program’s challenges and instant wins pay out.
Frequently asked questions
When did the word gamification come into use?
The first recorded uses date to 2008, according to the 2011 paper that defined the term. It spread widely in the second half of 2010, when several industry players and conferences took it up (Deterding et al., 2011). The paper says the term started in the digital media industry.
Is a points program already a form of gamification?
Partly, yes. Points and status levels are game design elements, so a points program meets the 2011 definition in part (Deterding et al.). What loyalty teams usually mean is a layer of shorter goals on top, so members have a reason to act between purchases.
What is the difference between gamification and a game?
A game is complete in itself, while gamification borrows parts of games for another purpose. The 2011 paper calls complete games built for a purpose beyond fun “serious games” and keeps them apart from gamification (Deterding et al.). A badge in a coffee app is gamification.
What is an instant win in a loyalty program?
An instant win reveals a prize at the moment of a qualifying action, such as a scan after purchase. The 2026 Monopoly game at McDonald’s pays instant-win food or 1,500 to 7,000 MyMcDonald’s Rewards points. The stated odds of winning are 1 in 5, mostly food prizes. No purchase is needed, and a free game piece can be requested by mail (McDonald’s).
Does gamification need an app?
No. The 2011 paper says that limiting gamification to digital technology would be an unnecessary constraint (Deterding et al.). The Monopoly game at McDonald’s starts with a sticker peeled off the packaging and ends with a scan in the app (McDonald’s). A paper punch card is gamification with no screen at all.