Loyalty Programs

Kevin Drum and I seldom agree on business and economics related issues, but we both agree that consumer loyalty programs suck.  Here is Drum on loyalty programs, and here is my extended screed.


  1. Tom Kelly:

    Albertson's here in Dallas has just dropped their loyalty card. I never shop at Kroger across the street because I refuse to do the loyalty card thing.

  2. Thomas:

    I simply type in my parents phone number for all those, they have an account, I have the same name, I don't have to carry the card and it messes with the information pattern they are trying to collect.

    Other people have found ways to game the systems like here http://www.wired.com/techbiz/media/news/2003/07/59589

  3. Erik The Red:

    I'd agree with Thomas - the easiest way to have your cake and eat it too (as long as we're talking about loyalty programs that don't make sense, I'm going to throw in a nonsensical metaphor) is to lie like a rug. I signed up for my Ralph's Club card with a fake phone number that I use whenever I check out.

    Really, though, Warren's previous article leaves out the most likely possible use of your "identity info" - to spam you with more crap that you don't want (whether by e-mail or dead-tree mail). The only good news: most companies that abuse their customers too much eventually go out of business (assuming their competition isn't worse).

  4. L Nettles:

    I am in complete agreement with you on the loyalty programs, I have a bunch of grocery store cards, but will go out of my way to shop at ALDI. They charge for grocery bags, don't take checks or credit cards, make you bag your own purchases, but the prices are incredibly low and the checkout lines are amazingly fast.

    To understand the thinking that creates the cards you might find
    The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car! by Tim Harford an interesting read.

  5. Xmas:

    The Big Y stores in Massachusetts give out prizes/free stuff when you use their loyalty cards. The more often you use the card, the more you likely you are to hit the big prize (usually a free trip to somewhere tropical).