Are All Of These Loyalty Programs Worth It?

You’re just six more purchases from a free coffee. You’re four more hole punches from a free sandwich. If you amass 500 more points, that airline will let you fly the plane.

Maybe that last one isn’t real (yet), but loyalty programs have become ubiquitous. As of 2016, long before the current loyalty gold rush, Accenture reported that 90% of companies already had programs that gave you “free” stuff for making purchases.

But these plans can come at a cost.

Loyalty being punished?

If you’ve noticed the perks aren’t as perky as they were when you first joined a given club, you might not be imagining things. The Washington Post looked into potential loyalty paranoia and instead found that Starbucks and other companies might use your info to cut back on your deals through surveillance pricing:

• Former FTC officials Samuel Levine and Stephanie Nguyen told the outlet that some companies will use AI and your personal data to charge higher prices to specific patrons.
• A study from the Vanderbilt Policy Accelerator and the University of California at Berkeley’s Center for Consumer Law & Economic Justice also found that these programs can invert the idea of loyalty, benefiting companies more than customers.

Data concerns: Ask that app not to track all you want, but some are still able to gather enough data in other ways to determine things like your income and how much money you’re willing to fork over. The author of the WaPo story requested and received his data report from Starbucks, which showed every drink and snack he had bought, every offer he had received, and every tap he made in the app. That kind of data could be shared with dozens of tech firms that specialize in tailoring prices.

Open investigation: The FTC began investigating surveillance pricing in July 2024, but when the Trump administration took office, it halted the probe. Levine and Nguyen said they’d like to see it resume. Noting that in some cases loyalty programs may be the only path to a discount, Levine told WaPo, “We shouldn’t be put in a position where we have to decide between affording our groceries and protecting our privacy.”—DL