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I have had some loyalty cards made up from Vistaprint (pretty much your generic card you get from coffee shops for example), and once the student has got 10 stamps on the card they get a free half hour lesson, or I do an hour lesson for £10 as then it works out the same.
I only give them out after they have been coming for lessons for 6 months or more though, but I suppose you could give them out whenever you want!