Loyalty programs sound like they require dedicated software, and for a large-scale operation they eventually might, but a small shop can build a genuinely effective return-customer incentive with tools that are either already built into your platform or require no additional app at all.
The simplest version, if you're on Etsy: Etsy allows sellers to send private, targeted discount codes directly to specific past customers through their messaging or marketing tools — meaning you can manually (or with light organization via a spreadsheet tracking who's purchased before) send a small "thanks for being a repeat customer" discount code to people who've bought from you previously, without needing any third-party loyalty app.
On Shopify, built-in discount code functionality similarly lets you create a specific code and share it directly via email (tying back to the email list building covered elsewhere) with past customers specifically, rather than a site-wide public discount everyone gets regardless of purchase history.
A simple, sustainable structure that doesn't require ongoing manual tracking effort: a standing "welcome back" discount code, mentioned in your post-purchase packaging insert or thank-you email, that any past customer can use on a future order — this doesn't require you to manually track and individually message each customer, since the incentive is baked into your existing post-purchase touchpoints rather than requiring active, ongoing outreach.
Timing this around a customer's likely reason to return also helps — a discount code mentioned specifically around a seasonal collection launch ("here's 10% off if you're building out this year's Halloween pieces too") ties the incentive to a concrete, timely reason to actually use it, rather than a generic, easily-forgotten discount with no specific prompt attached.
None of this requires dedicated loyalty software for a shop of modest size — it's mostly about using tools your platform already provides deliberately, tied to the natural touchpoints (packaging, email, seasonal launches) that already exist in your process, rather than building an entirely separate loyalty system from scratch.