Loyalty-card startups give merchants a reason to ignore Groupon

New York City baker Eileen Avezzano says she has a better way than Groupon Inc. (GRPN) (GRPN)’s online deals to entice customers to buy her cheesecakes again: She doles out loyalty cards that reward buyers for return visits.

The cards, designed by Cartera Commerce Inc., are digital instead of physical, and are linked to credit cards consumers already use. They let merchants provide a discount, or a reward such as airline miles, every time consumers buy. A shopper may swipe a card, and a retailer will automatically deduct some money off the bill.