Catering Rewards: Why They Differ from Restaurant Rewards (and How to Get Them Right)

Imagine an office manager placing a $1,000 catering order for a corporate lunch and getting the same buy 10 get 1 free punch-card reward that a regular diner gets for buying a $10 burger. Not very compelling, right? Yet many restaurants make this exact mistake: treating catering customers just like dine-in customers when it comes to loyalty and rewards. In this article, we’ll explore why catering rewards are not the same as restaurant rewards (and why most restaurants mess this up). We’ll break down how catering customers differ, the real economics of catering orders especially via marketplaces, why standard discounts fail but smart rewards work, and what a modern catering rewards program should look like.
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Why Do Catering Customers Behave Differently from Dine-In Customers?
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Catering customers are a whole different breed compared to your typical restaurant diner. For one, catering orders are usually larger, less frequent, and often business-related rather than casual personal meals. A dine-in guest might swing by for a $12 lunch or a $30 dinner because they’re craving your food. A catering customer, on the other hand, might be an office manager, event planner, or administrative assistant ordering on behalf of a team or company. They’re buying those $12 burgers in bulk as a $1,200 order for a corporate meeting or holiday party. The motivations and behaviors in these scenarios are worlds apart.

Consider frequency vs. size: a regular customer might visit weekly for a bite, whereas a catering client might order only monthly or quarterly, but in huge volume. This means catering customers aren’t won over by the same incentives meant to drive frequent visits. They care less about visit #10 free and more about reliability, convenience, and personal payoff for choosing your service. In many cases, the person placing a catering order won’t even personally eat the food, they’re ordering for others.

If your catering rewards program only offers a free tray of sandwiches for the group after X orders, that may not excite an office manager who personally doesn’t gain from it. On the other hand, a reward that directly benefits the person ordering like points they can convert into personal gift cards or perks can strongly influence where they choose to order. In short, catering loyalty is about making the life of the order-placer easier and more rewarding: they value convenience, consistency, and incentives more than the average dine-in customer who might be chasing foodie experiences or emotional connections with your brand.
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What Are the Real Economics of Catering Orders vs. Marketplace Orders?
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From a financial perspective, catering orders can be both a blessing and a curse. On one hand, a single catering order might equal the revenue of 20–50 individual dine-in transactions all at once, jackpot. On the other hand, the costs and margin considerations are very different. Fulfilling a $1,000 catering order involves big quantities food costs, possible delivery and logistics expenses, and often a commission if that order comes via a third-party platform. So while the top-line revenue is large, the bottom-line profit per order can actually be slimmer if you’re not careful.

Let’s break down a direct catering order first. Suppose a local business calls you directly for a $500 catering order. You’ll incur food costs typically 25-30% of revenue in many restaurants and labor for preparation; you might also have additional packaging costs disposable trays, cutlery, etc. and perhaps the labor to deliver and set up. If you charge a delivery fee, that might offset some logistics cost. Importantly, a direct catering order usually doesn’t require paying out a hefty percentage to a middleman, so you keep the full $500 minus your costs in revenue. This is why many restaurants see catering as a high-margin opportunity when done right, you’re utilizing your kitchen during slow periods, using bulk production economies of scale, and capturing the full dollar from the customer. Marketplaces can be great for bringing you new business, but they don’t do it for free. Many charge 15-30% commission on each order, plus around a 2.75–3% payment processing fee. On a $500 order, you’d pay about $90 or more straight to the marketplace.

Beyond commissions, there are other hidden costs: marketplaces often own the customer relationship, not you.

That means the client who ordered might only remember the marketplace rather than building a direct loyalty to your brand. Next time, they could just as easily pick a different restaurant on that marketplace. In essence, you risk becoming a commodity on someone else’s platform. Also, to succeed on a marketplace, restaurants often feel pressure to offer discounts or pay for better placement to win orders, further squeezing margins. And remember, the person ordering might also be getting rewards from the marketplace which you as the restaurant are indirectly funding via those commissions.

So what are the real economics? A direct catering order might have, say, a 30-50% gross margin after food, labor, and packaging. A marketplace order could cut that margin down to 10-20% after you fork over nearly a fifth of the revenue in fees. In some cases, restaurants barely break even on marketplace orders, using them as a marketing expense to acquire new customers. That’s not sustainable if you stay 100% dependent on third parties.

This doesn’t mean marketplaces are evil, they solve a discovery problem and can jumpstart your catering business by bringing in orders you wouldn’t have had. But dependency is dangerous. The key is to balance your channels: enjoy the volume marketplaces provide, but have a plan to convert those clients to order direct over time. Instead of paying 18% to a marketplace, you could invest a smaller percentage of that order value into a loyalty reward for the client, encouraging them to stick with you and ideally, to order through your own website or catering coordinator next time for an even better deal.

The bottom line: Catering orders carry higher face value, but also higher stakes. Big checks can mean big profits or big losses depending on fees and costs. To maximize profitability, you want more direct orders and repeat business, and that’s where a tailored rewards approach versus blanket discounts comes in, as we’ll see next.
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Why Do Discounts Fail but Rewards Work in Catering?
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On the surface, discounts might sound like the same thing, after all, both give value back to the customer. But in practice, discounts e.g. 10% off an order can fail in catering, while rewards often work better. Here’s why.

First, large order sizes magnify the impact of discounts. A 10% discount on a $10 meal is just $1, a small nudge to encourage a purchase. But 10% off a $1,000 catering order is $100, which might completely wipe out your profit on that order. We’ve seen restaurant operators complain that heavy discounting on catering can wipe out their margins. Blanket discounts also train customers to never pay full price. If you’re constantly offering, say, $50 off your next catering, customers will wait for those deals and only order when the discount is available. This erodes your pricing power and brand image, where people won’t pay full menu price.

Second, catering customers are often spending someone else’s money e.g. their company’s. A straight discount on the order mostly benefits the company’s budget, not the individual placing the order. Paradoxically, that can make discounts less motivating for the order-placer. From the perspective of an office manager, getting 10% off the company’s bill doesn’t give them much in return, especially if competing options offer a personal perk. This is a key reason personalized rewards tend to beat generic discounts in catering. A points program that lets the admin rack up rewards they can use for themselves like gift cards, free personal meals, or even charitable donations in their name can be far more enticing than simply saving their employer a few bucks.

Third, rewards programs by nature encourage repeat business and loyalty rather than one-off bargain hunting. A discount is a one-time deal, it might attract an initial order, but it doesn’t inherently encourage the next one unless you keep offering more discounts. Rewards, however, say: Stick with us, and you’ll keep earning value. They turn large orders into a points stash or progress toward a meaningful perk, which psychologically invests the customer in coming back. Especially in catering, where frequency is lower, you want to capture that next order whenever it arises.

Finally, discounts can degrade your brand’s perceived quality, whereas exclusive rewards can enhance it. Conversely, framing value in terms of a loyalty program feels more like we value our best customers rather than we’re cheap. A rewards program avoids that by focusing on long-term benefits and behaviors like repeat ordering, referrals, etc. rather than short-term price cuts. In short, discounts often fail in catering because they cut deep into profit and don’t build ongoing loyalty, whereas rewards can be a win-win: the customer feels appreciated and motivated to return, and you protect your margins while fostering repeat business.
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When Do Catering Rewards Make Sense?
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As powerful as catering rewards can be, they are not a one-size-fits-all solution for every restaurant’s catering business at all times, especially when you have repeat customers, high competition, and good margins.

Repeat Catering Customers: If your catering channel already sees repeat orders from some customers e.g. a handful of businesses ordering weekly or monthly, a rewards program is a great way to solidify and grow that loyalty. It can turn occasional clients into regulars and encourage regulars to concentrate more of their orders with you. Even if you’re still building your catering client base, if your goal is to increase repeat frequency or retain clients year-over-year, offering rewards can give you an edge. Essentially, whenever you identify that lifetime value and repeat rate are important for your catering, a loyalty program makes sense to boost those metrics.

High Competition / Need Differentiation: If a corporate client is deciding between you and two competitors who are all similarly priced and well-reviewed, the fact that you offer rewards could tip them in your favor. Also, if you’re trying to convert customers from marketplaces to direct, a rewards program is almost essential, it’s your value proposition for why they should leave the marketplace where they’re getting points and come to you directly where they’ll get points or perks from you instead.

Sufficient Margin: If your catering operation has healthy margins or if you price your catering menu with a bit of wiggle room for promos, then a rewards program is a smart reinvestment of a portion of those margins. For example, if on average you net 20% margin on catering orders, allocating say 5% of sales to loyalty rewards can be seen as a marketing cost to drive more business, while still leaving you 15%. In contrast, if your margin is razor thin, you might need to first adjust your pricing or costs before launching rewards, otherwise you could be giving away money you don’t have.

Large Scale: Restaurants or chains with a significant catering operation or ambition to build one should consider a rewards program early on. If you’re doing dozens of catering orders a week, a structured program will help manage and incentivize that volume systematically. Similarly, if you’ve made catering a strategic growth pillar, a loyalty program gives you a framework to scale growth while retaining customers. It also provides valuable data: tracking points and rewards can help you identify your best customers and sales trends.
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When catering rewards might not make sense yet?
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Catering rewards may not make sense if catering is still occasional, unstructured, or operationally fragile. If orders are rare, mostly one-off, or driven by special events with little chance of repeat behavior, a formal rewards program adds complexity without clear upside. Rewards work best when there is repeat potential and enough operational consistency to deliver a reliable experience.

Very Low Catering Volume: If your restaurant only does a handful of catering orders a year, or if you primarily cater one-off events like weddings or big parties where repeat business is naturally low, then a formal rewards program may be overkill. For instance, a fine-dining restaurant that occasionally caters a wedding probably gains little from offering that bride and groom a future catering discount, they won’t be ordering again soon, if ever. In such cases, focusing on exceptional service and asking for referrals might be a better tactic than a points system.

Resource Constraints: If you’re a very small operation barely keeping up with day-to-day tasks, launching a rewards program right now might stretch you too thin, resulting in a half-baked program. It’s better to wait until you have either the staff or a tech partner loyalty platform to handle it properly. A poorly managed program e.g. not tracking points correctly, not communicating rewards, etc. can frustrate customers more than having none at all.

New Customer Acquisition: If you’re brand new to catering and mostly need new customers to give you a try in the first place, you might prioritize other marketing incentives like a one-time introductory offer, or partnering with marketplaces for exposure before layering on a loyalty scheme. Rewards programs shine for retention, not as much for initial acquisition. That said, you can still start simple like logging repeat customers manually for later reward while focusing your main energy on growing the customer base. Once you have a base, then roll out the fancy loyalty program to keep them coming.

Margins are Extremely Tight: When a restaurant’s catering is struggling to be profitable at all, a loyalty program might seem like a luxury. In such times, the focus might need to be on improving operational efficiency or adjusting pricing first. However, be careful: sometimes a lack of repeat business is exactly why margins are tight constant discounting to attract one-timers, etc. So analyze the cause. If you’re discounting heavily to win orders thus hurting margin, switching to a rewards model could actually help. But if it’s simply that costs are high, fix that before promising rewards.
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What Does a Modern Catering Rewards System Look Like?
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Segmentation and Tiers for High Spenders: Unlike a typical loyalty program where spending $100 might get you a free dessert, catering programs deal with much larger spend levels and thus often use tiered membership levels. For example, a catering loyalty program might have Silver, Gold, Platinum, and Elite tiers based on annual catering spend instead of counting visits. As customers hit $5,000, $10,000, or $20,000 in yearly catering spend, they move up tiers and unlock bigger benefits. This tiered approach acknowledges that someone who orders $15,000 of catering a year is a highly valuable client and should be rewarded differently than someone who orders $500 a year.

Valuable Rewards: Modern catering rewards often let points be redeemed for benefits that personally reward the person placing the order. Points that can only be redeemed for more catering trays are not always appealing. If an admin is ordering lunch for their company, they often prefer a reward they can use personally. This is why leading programs focus on Amazon gift cards. Amazon offers one of the largest catalogs available, making the reward feel as good as cash and universally useful regardless of personal preferences.

Ease of Use and Integration: A modern catering rewards system should be digital and seamless. Paper punch cards or manual tracking do not scale. If you have an online ordering system, the rewards program should integrate directly so customers earn points automatically and can redeem them easily. Ideally, there is a simple dashboard where repeat catering clients can see their tier status, points balance, and available Amazon gift card rewards without additional friction.

CateringRewards is a platform built to drive more direct catering orders and reduce dependence on marketplace commissions. It replaces clunky points and food-only perks with cashback rewards redeemable as Amazon gift cards, making the incentive simple, flexible, and genuinely personal for the buyer.

In essence, a modern catering rewards system goes beyond a generic tenth meal free approach. It is structured, often tiered, offers meaningful rewards scaled to high-dollar purchases, and rewards the right person in the transaction. It should feel like a VIP club for businesses and admins who bring significant catering revenue. By making your best catering clients feel valued and giving them tangible rewards through a universally useful option like Amazon gift cards, you encourage repeat orders and motivate customers to consolidate more of their catering spend with you.

Catering rewards are a different animal from standard restaurant loyalty programs. Your catering customers think differently, spend differently, and expect different things, and your rewards strategy must reflect that. By understanding the unique economics of catering especially the impact of third-party marketplaces, avoiding the margin-killing trap of blanket discounts, and designing a modern, tailored rewards program, you can turn catering clients into loyal advocates who come back order after order. Just remember to implement what makes sense for your scale and to always reward the person behind the order, not just the order itself. Done right, a catering rewards program isn’t just a feel-good perk, it’s a savvy investment in growth, profitability, and customer relationships that pay dividends quite literally, in points and profits for years to come.
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Frequently Asked Questions
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How are catering rewards different from restaurant loyalty programs?

Catering rewards focus on large order value, low frequency, and professional buyers. Restaurant loyalty is designed for frequent personal visits. Catering rewards must prioritize reliability, personal incentives, and high spend tiers rather than visit counts or free food.

Why do Amazon gift cards work better for catering rewards?

Amazon gift cards feel as good as cash and are universally useful. They do not force buyers to redeem rewards at a single restaurant or category. This makes rewards feel personal, flexible, and worth caring about.

Should catering rewards replace marketplace programs?

No. Marketplaces are effective for discovery. Catering rewards help reduce dependency by converting repeat buyers to direct ordering over time while preserving margins and ownership.
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Do catering rewards actually increase repeat orders?

Yes, when rewards benefit the person placing the order and remove friction. The biggest lift comes from increased order size, faster reorders, and migration from marketplace to direct channels.

Are catering rewards better than offering discounts on large orders?

Yes. Discounts reduce perceived value and eat into profit on high-ticket orders. Rewards preserve pricing integrity while still giving buyers a reason to choose you again.

Who should catering rewards be designed for: the company or the individual?

They should be designed for the individual placing the order. Companies care about budget, but individuals care about ease, reliability, and personal benefit. Aligning rewards with the individual drives loyalty.