Small businesses need an easy way to deploy rewards programs for their customers, and Points.com is trying to achieve that with its new Magento storefront application.

Loyalty programs are a way to bring in repeat customers by making purchases feel like a two-for-one deal. For instance, buying a pair of shoes may result in extra points on your US Airways account. Small businesses have a harder time accessing these types of partnerships and can’t provide the same level rewards for their customers.

This is where eBay’s digital storefront Magento comes in. The storefront not only acts as the point of sale and inventory hub for small businesses, but also provides applications for owners to personalize customer experiences. Applications with Magento are called “extensions” and live in Magento Connect, Magento’s marketplace.

Points.com created one of these applications by partnering with Sweet Tooth, an existing rewards application, which small businesses can download and use in their Magento-driven online shops.

“It provides a channel,” said Sean Hutchison, vice president of consumer products at Points.com, in an interview with VentureBeat, “The push is us working with our partners from all over the world.”

The partnership works like this: Sweet Tooth provides the actual “bucks” interface where people can see and manage their rewards. Points.com then fills the “bucks” with something meaningful such as flight or hotel miles, through its own partnerships. Businesses using this app will have access to points from American Airlines AAdvantage, Best Buy Reward Zone, Frontier Airlines EarlyReturns, US Airways Dividend Miles, and other international organizations.

For Points.com, this is phase one of a broader vision for connecting small businesses to loyalty rewards programs. The first concern was penetrating a market with little to no access to rewards programs. The Magento application achieves this. Phase two is integrating new types of rewards and currency beyond the obvious airline and hotel miles currently available.

“When we look ahead at our roadmap, we want to take the app and deploy it as far as we can,” said Hutchison, “We’re a currency agnostic solution.”

“Currency agnostic” means tackling Facebook Credits and virtual gaming goods. The two have become a precious commodity on the Web already, with incentivized programs such as TapJoy, CrowdTwist and CrowdTap cropping up, exchanging virtual goods for a service on the customer’s part. For small e-commerce business, however, this means offering a new reward that could rope in groups of customers you may not have targeted specifically in the past. For instance social gamers who will enjoy the, “Buy a pair of overalls? Wear them while you play Farmville and spend the extra Facebook Credits you earned,” scenario.

Virtual goods will have to wait until after the launch of this Magento app, which will come out by the end of November. The company is currently focusing on the North American demographic, but will move on to Europe with Virgin Atlantic and British Airways partnerships.

Image courtesy of ramberto.