Coffee loyalty cards have always been a pain. Writing from personal experience, inevitably my card gets lost, ripped or disintegrates in the wash before I accumulate the ten or whatever number of stamps required to get my free latte. Some cafes like Te Aro have tried to solve this problem by keeping the cards on file, but even this isn't an ideal solution. There has to be a better way.

And now there is. Enter Punchd, a new mobile app (available for both iPhone and Android) that stores digital stamps on your smartphone. I spotted this recently at Thor Espresso Bar and here's how it works:

• Once I have the free app downloaded to my smartphone I simply scan a QR code that the barista presents me after I purchase my drink. The scan takes about a second and immediately adds a stamp to my digital loyalty card. The app knows which loyalty card it is in part due to the geo-location of my phone. It knows which cafe I'm at.
• From there it's up to each cafe to define the rules for the promotion. In the case of Thor, the card says once I buy ten coffees I qualify for a free dopio espresso based drink that costs $4 or less.

Interestingly, it appears that Punchd isn't alone at making moves into this space. The Google-owned company has competition from Perka as well as Toronto-based CardFox which just unveiled itself a few days ago at Startup Weekend. They make their money by charging business owners a monthly fee. According to someone I talked to at Thor, they've been using the app for two weeks. They're one of two businesses to be doing so in the Toronto-area (the other is Burger Bar in Kensington Market).

What do you think of this idea? It it something you'd use? Add your thoughts to the comment form below.