This seems to compete with some of the benefits of using Google Wallet. Although, I suppose a Google Wallet based loyalty card requires a lot larger investment by the business.

Also since a QR code is just an image and not something more complicated like an NFC tag what's to stop someone from taking a picture of it with their phone and scanning it multiple times at home?

edit:* well looking at their FAQ they say this: Patent-pending technology guarantees the integrity of your loyalty program. GPS triangulation, velocity analysis, and statistical variation keep things secure.

That still has to trust the smartphone to report the correct GPS and velocity, additionally I think faking the statistical variation might not be too difficult.