Daily deals service Groupon announced today that it has expanded its product lineup to include Groupon Rewards, which will hopefully help businesses improve customer retention.

The loyalty program – which acts as an alternative to the punch card – integrates with your Point of Sale system to offer a customer a special deal whenever a certain threshold is reached.

“Consumers earn rewards at participating merchants by simply paying with the credit or debit card they have on file at Groupon.com,” the company explained in a blog post. After spending an amount set by the merchant, the consumer unlocks the ability to purchase a special Groupon for that business.”

Groupon Rewards is free for merchants; Groupon will take a commission from the reward vouchers. Additionally, the company does not require a merchant to run a regular daily deal in order to participate.

Its customer analytics will provide information on new and repeat customers, including how much is being spent and how frequently consumers visit your business.

Groupon believes that the addition of the new loyalty system will help drive repeat business instead of just attracting one-time visitors.

[Disclaimer: Sprout Social has financial ties to Groupon.]

[Via: Mashable, Image credit: Tripp]