Definition of frequency discount

loyalty program offering a discount on future purchases based on how often the customer makes a purchase, without regard to the dollar value of each purchase made; also called frequent user program. By offering frequency-based incentives, the marketer hopes to capture and maintain market share. The VIP perks that come with the top award levels of some frequency discount programs have acquired a social cachet that exceeds the actual financial reward. Frequency discount programs tend to increase spending because consumers will deliberately inconvenience themselves or buy more than they need to earn the awards and status. Frequency discounts are offered by hotels and restaurants based on the number of rooms or meals purchased, offering free room upgrades or free meals. Airline and car rental companies offer free upgrades to passengers who travel a minimum number of miles or who rent cars a number of times, usually within a specified period of time.