Editing Loyalty program (section)

==Criticism==
Evidence for the effectiveness of loyalty programs is controversial. Many companies are unsure whether and how to use customer loyalty programs profitably. Many programs (regardless of location, size, or industry) are run without the appropriate metrics or target parameters.<ref>{{cite journal |last1=Meili|first1=Alexander |title=Loyalty Program Assessment. KPI-Based Evaluation of Customer Loyalty Programs |journal=HWZ Working Paper Series |date=2022 |doi=10.5281/zenodo.6521984 |doi-access=free }}</ref>

Some companies complain that loyalty programs discount goods to people who are buying goods anyway.<ref name="Leveraging Loyalty Programs Using C"/> Moreover, the expense of participating in these programs rarely generates a good return on investment. The Forte Consultancy Group regards loyalty programs as [[Bribery|bribes]].<ref>
{{cite web
 | url= https://books.google.com/books?id=DPHuBQAAQBAJ
 | title= Designing Best-in-Class Loyalty Programs – Getting the Benefits Right
 | series= White Paper
 | publisher= Forte Consultancy
 | access-date= 28 April 2019
 | quote= Loyalty program benefits are, in their essence, a bribe. In exchange for a set of benefits, a consumer allows the company to give those benefits to track his or her purchasing behavior.}}</ref> In the case of infrequent spenders, loyalty fees provide a means of [[subsidy|subsidizing]] discounts.

A 2015 study found that most supermarket loyalty cards in the United States do not offer any real value to their customers.<ref>{{cite web
|website= Weekly Ads and Circulars
|url= http://www.iweeklyads.com/the-best-and-worst-loyalty-programs-grocery-retailer-and-drug-stores
|title= Discover the Best and Worst Loyalty Programs with Our New Infographic
|access-date= 3 September 2015
|quote= The reality is, not all loyalty rewards programs actually add value. Some programs only exist to draw you in and tempt you away from competitors that could actually offer you a better deal. The worst? It turns out that just about any supermarket chain will offer you nothing but bad deals.}}</ref> Furthermore, commercial use of customers' [[personal data]] – collected as part of loyalty programs – has the potential for abuse; it is highly likely that consumer purchases are tracked and used for [[marketing research]] to increase the efficiency of marketing and advertising, which is one of the purposes of offering the loyalty card.<ref>{{Cite news | url=https://www.bbc.com/news/technology-43483426 | title=How do companies use my loyalty card data? | work=BBC News | date=21 March 2018 }}</ref><ref name="papers.ssrn.com">{{cite journal |last1=Taylor |first1=Wayne |last2=Hollenbeck |first2=Brett |title=Leveraging Loyalty Programs Using Competitor Based Targeting |journal=SMU Cox School of Business Research Paper No. 19-10 |date=2021 |ssrn=3353432 |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353432}}</ref> For some customers, participating in a loyalty program (even with a fake or anonymous card) funds activities that violate privacy.<ref>{{cite web | last = Albrecht | first = Katherine | website = Consumers Against Supermarket Privacy Invasion And Numbering | url = http://www.nocards.org/essays/nofakes.shtml | title = Why getting a shopper card under a fake name is not the answer | access-date = 23 November 2007 | archive-url = https://web.archive.org/web/20071019035625/http://www.nocards.org/essays/nofakes.shtml | archive-date = 19 October 2007 | url-status = dead | df = dmy-all }}</ref> Consumers have also expressed concern about the integration of [[RFID]] technology into loyalty-card systems.<ref>
{{cite news |last= Blau |first= John | work= [[InfoWorld]] | url= http://www.infoworld.com/article/04/03/01/HNmetrostore_1.html | archive-url= https://web.archive.org/web/20040312062250/http://www.infoworld.com/article/04/03/01/HNmetrostore_1.html | url-status= dead | archive-date= 12 March 2004 | title= Metro Store bows to pressure from anti-RFID activists | date= 1 March 2004 | access-date= 23 November 2007 | quote = Ahead of a planned demonstration on Saturday, Metro AG decided to drop the use of RFID tags in customer loyalty cards used at its Extra Future Store supermarket in Rheinberg, Germany, where the retail group is testing several new IT retail technologies, Metro company spokesman Albrecht von Truchsess said Monday.}}
</ref>

One may view loyalty and credit-card reward-plans as modern-day examples of [[Kickback (bribery)|kickbacks]].<ref>
Compare:
{{cite book
 | last1 = Gup
 | first1 = Benton E.
 | title = Bank Fraud: Exposing the Hidden Threat to Financial Institutions
 | year = 1990
 | url = https://books.google.com/books?id=zJjaAAAAMAAJ
 | location = Rolling Meadows, Illinois
 | publisher = Bankers Publishing Company
 | publication-date = 1990
 | page = 85
 | isbn = 9781555201678
 | access-date = 10 January 2021
 | quote = [...] kickback and credit card schemes that are relatively small by themselves, but collectively qualify as major frauds.
}}
</ref>
Employees who need to buy something (such as an airline flight or a hotel room) for a [[business trip]], but who have discretion to decide which airline or hotel chain to use, have an incentive to choose the payment method that provides the most [[Cashback reward program|cash-back]],<ref>
{{cite book
 | last1 = Kowalik
 | first1 = Frank
 | title = IRS Humbug: IRS Weapons of Enslavement
 | year = 1991
 | url = https://books.google.com/books?id=IvUJAQAAMAAJ
 | location = Oakland Park, Florida
 | publisher = Universalistic Publishers
 | publication-date = 1991
 | page = 46
 | isbn = 9780962655203
 | access-date = 10 January 2021
 | quote = Among other terms used for kickbacks are sales incentive, cash back, coupon sales, commissions, and discounts. 
}}
</ref> [[Cashback reward program|credit-card rewards]] or loyalty points instead of minimizing costs for their employer.<ref>{{cite journal |last1=Shugan |first1=Steve |title=Brand Loyalty Programs: Are They Shams? |journal=Marketing Science |date=2005 |volume=24 |issue=2 |pages=185–193 |doi=10.1287/mksc.1050.0124 |doi-access=free }}</ref>