Ace Rewards is the loyalty program of Ace Hardware, a cooperative of 5,000-plus independently owned hardware stores. Members earn points per dollar and receive a birthday reward, but because each Ace is independently operated, local stores can layer additional perks -- local events, community donations, and neighborhood-specific offers -- on top of the national program framework. The co-op model creates loyalty programs with local character unavailable to centralized chains.
This article breaks down how Ace Rewards works, why local customization outperforms generic national program language for community retailers, and three specific tactics any independent hardware or home improvement store can use to build the same loyalty advantage.
What Ace Hardware is actually doing
Ace Hardware is not a traditional retail chain. It is a co-operative of independently owned stores that share a common brand, common supply chain, and -- relevant here -- a common loyalty program framework that each owner can extend.
The national program provides the foundation: points on purchases, reward certificate redemption, birthday bonus. These mechanics are consistent across all 5,000-plus locations and give the program enough standardization for members who visit multiple Ace locations.
The co-op structure gives each store owner the ability to layer local programs on top. A rural Ace in Iowa can run a spring planting workshop for gardening members. A suburban Ace in Massachusetts can donate 1% of member purchases to the local school's building fund. An urban Ace in Chicago can offer a members-only contractor meet-and-greet event. None of these additions require national program approval because they are funded and operated at the local store level.
The result is a program that feels like a local hardware store's loyalty program -- not a corporate chain's. The members reading the push notification from their local Ace know the store manager's name. The event invitation comes from a business they actually have a relationship with. That relationship quality is the loyalty that corporate chains spend significant marketing budgets trying to simulate.
Why local loyalty programs outperform generic chain programs
The research on loyalty program effectiveness consistently finds that members who feel personally known and valued by a business show higher retention rates than members who feel like account numbers in a database. This is intuitive -- people buy from people they like and trust, and "like and trust" is easier to build at local scale than at national scale.
A loyalty program for a national chain faces an inherent authenticity problem. The chain's messaging -- "we know you," "you're one of our best customers" -- is generated by an algorithm for millions of members simultaneously. Every member reading the message knows it is not personal. The personalization is simulated.
A loyalty program for a local hardware store does not have this problem. The message from Tom at Tom's Hardware is from Tom. The event at the store is run by the owner and staff who work there every week. The community donation goes to the school that local members' children attend. The program cannot fake local character because it is not trying to -- it simply is local.
Ace's co-op model proves this at scale. Individual Ace stores consistently outperform Home Depot and Lowe's on customer satisfaction metrics in surveys. The explanation is not product variety (Home Depot and Lowe's have more) or price (the chains often match or beat Ace on price). The explanation is service and community relationship. The local Ace owner who knows which contractors in the neighborhood do which type of work is providing something the chain cannot algorithmically replicate.
The loyalty program is the formal structure for what the independent store already does informally.
Building local loyalty without corporate infrastructure
Paper punch cards can run a basic visit mechanic but cannot deliver local program character. The card is a physical object; the local character is in the messaging, the events, the community partnerships. Those things require a communication channel.
Branded apps face the 83% uninstall rate problem. For a hardware store where most members visit once every four to six weeks for a specific project need, the app is typically deleted before the second visit. The push notification channel is gone. The local event invitation has no delivery mechanism.
A wallet pass on Apple Wallet and Google Wallet holds between visits and delivers the local character through both the visual design and the push notification content.
The visual design can be genuinely local. The pass displays the store's name, the neighborhood or community name, a local image (the main street, the town square, the local landmark). Every time the member opens their wallet, the pass is a signal that this program is from their community, not from a corporate headquarters.
Push notifications carry the local voice. "Workshop Saturday at 10am: deck staining techniques for spring. Members get first pick of seats. 8 spots left." That message reads differently from a corporate retailer's promotional push. It reads as a personal invitation from a local business.
The push notification open rate on wallet passes runs approximately 90%. An event invitation to 200 local members with a 90% open rate reaches 180 people who are already engaged with the business. A flyer in the window might reach 20.
What an independent hardware or home improvement store can copy on Monday
1. Add one community-tied reward to the standard program
The simplest version: for every $200 in annual member spend, your business donates $2 to a local school, sports team, or community garden. The member is not receiving the donation; they are enabling it. The donation is a values signal, not a financial incentive. But it changes how the member perceives the loyalty program.
"Buy from us and a portion of your spend helps the local school" is a message that is impossible for Home Depot to replicate authentically. Customers who care about their community (and most people care about the community they live in) respond to programs that share those values.
The donation does not need to be large. $2 per $200 spent is 1% of revenue. On 300 active members spending an average of $400/year, that is $2,400 in annual member spend times 1% = $24 in donations. The community goodwill generated by that $24 -- the local school's acknowledgment of your store's support, the word-of-mouth from parents who are also customers -- is worth far more than $24 in paid advertising.
2. Brand the program with local character
Name the loyalty tiers after local neighborhoods, landmarks, or historical references. "Tom's Hardware Neighbor Club" beats "Gold Tier" in local resonance. The wallet pass can display the local name and a neighborhood image rather than a generic retail-brand template.
This matters because it changes how members describe the program to other people. "I'm in Tom's Neighbor Club -- they do free workshops and donate to the school" is a conversation. "I have a Home Depot rewards card" is not.
3. Run one members-only event per quarter
The event is the community program made physical. A Saturday morning workshop on deck staining for spring. A November demo day on weatherproofing before winter. A contractor Q&A session where local pros share advice with homeowners. The events cost almost nothing to run -- the store's own staff runs them, the materials are from existing inventory, the venue is the store itself.
What the event produces is a group of members who have now spent time together at your business, have a shared experience, and associate your store with expertise and community. Those members are the store's most loyal customers and most active advocates.
Push the event invitation to your member list two weeks before. Reminder one week before. Final reminder the day before. Three pushes, 90% open rate, event filled.
Ace Rewards vs. comparable hardware/home improvement loyalty programs
| Program | Local customization | Community feature | Points program | Event capability |
|---|---|---|---|---|
| Ace Rewards | Yes (co-op model) | Optional per store | Yes | At store discretion |
| Home Depot Pro Xtra | No (national) | No | Points + volume pricing | No |
| Lowe's MyLowe's | No (national) | No | Points + purchase history | No |
| Independent hardware store on LoyaltyPass | Full | Fully configurable | Yes | Push notification events |
The comparison makes clear that Ace's co-op model is the closest structural analog to what an independent hardware store can run on its own. The national chains have larger programs but less local character. The independent store running a wallet-pass program has more flexibility than Ace (the national framework has some constraints) and more capability than paper cards.
Local loyalty is not a consolation prize for businesses too small to build a national program. It is a genuine competitive advantage that national chains cannot replicate at the local level. The wallet-pass infrastructure to run it costs under $30/month. The local relationships that make it work are already there.
