I've never cared to learn much about coffee, but I very much like drinking it. I like it whether it tastes like dishwater or a smooth blend of Tanzanian peaberry and citrus, and whether it is produced by a cooperative of well-paid and environmentally conscious farmers in Nicaragua or an army of underpaid, underage employees of a warlord in Somalia. However, as much as possible, I prefer it cheap.
Over the years, I've paid mo' fo Joe than I deserve. Even though I spent many disgraceful years as a coffeehouse leach -- the student who buys a small cup for $1.65 and then uses the store's table and WiFi for 6 hours -- the cost of not making my own coffee probably exceeds the small sum I've made blogging.
Therefore, I strongly preferred coffee joints that provide punch cards to reward loyal patrons.
Punch card policies differ drastically between shops. Some, such as Espresso Royale and Barriques requires 10 punches and reward you with a free drink of any size and type. Victor Allen's required 20 is demoralizing. Others, such as my former employer, Indie Coffee, don't offer punch cards but instead allow you to put money on a store debit card and give you a discount if you put a certain amount on ($1 for every $20 at Indie). Fair Trade and Michelangelo's offer no such deals. (Earlier I wrote that Barriques did not offer punch cards. The comment below clarifies that mistake.)
Laurie, the owner of Fair Trade, says the store used to have a punch card policy, but that she came to believe customers were "self-punching" to get free drinks. She says that rewarding regular customers on an individual basis is a more fulfilling experience for her and is more appreciated by the customers, since the free coffee or treat is spontaneous and unexpected.
Having a barista or bartender choose you as the recipient of free goods is a far superior feeling to getting a free drink for every 10 or 20, which any chump can do. However, secretly rewarding regular customers cannot possibly be as effective at creating new regulars.
In the end, however, both methods of rewards are limited. The best way to give away free stuff and gain loyal customers is through social networks. Why give a customer a free drink before requiring them to become a fan on Facebook or a follower on Twitter? That way, you can lure customers in with specials and form a stronger bond with them by encouraging them to interact with you. For instance, "Whoever comes up with best idea for new mocha flavor gets free coffee all next week! #Madison #coffee."
In Madison, perhaps the best example of the new model is AJ Bombers, the burger joint on Henry and Gilman started by a Milwaukee entrepreneur. Not only does the restaurant boast huge followings on social networks, but it is constantly giving people reasons to pay check them! Specials, contests...even simply offering pictures of their delicious grub distinguishes them from the competition.