By: admin On: January 11, 2017 In: Uncategorized Comments: 0

What’s On Your Keychain?

Most of us have them…loyalty cards for our favorite places, brands, and services.  We’re rewarded with enticing membership offers for discount prices, cash-back savings, reward points toward merchandise, VIP experiences, etc.—you get the idea. Companies are finding more and more creative ways to reward our loyalty and keep us as customers.

According to Colloquy, a marketing firm devoted to the loyalty marketing industry, U.S. memberships in customer-loyalty programs surpassed 2 billion in 2011!  Although the average household is enrolled in more than 18 programs, only 8.4 are actively used.

But what exactly are these loyalty programs? What are they tracking, where does your personal information go, and what are the benefits for you, the consumer?

Why Are Reward Cards So Popular?
Reward cards can actually be, well, rewarding! People love their cash-back bonuses and reward points, and smart consumers use these offers to their advantage.


  • Targeted advertisements. These can be good for the customer and the company. Most of us don’t have time to scan through mountains of advertisements or stroll down aisles hoping to find our items on-sale. Send me what I want, with attractive rewards, and I’ll probably be a repeat customer and recommend you along the way!
  • Reliability. If you’re happy with the company’s products, you can get what you want from a company you trust—and get rewarded for doing so.
  • Simplicity. Consumer loyalty programs cut out the advertising noise. We are constantly bombarded by relentless marketing efforts to attract our wallets, and simplicity is refreshing. The purchase-decision is simplified.
  • Self-indulgence. Using your rewards just may be a way of rewarding yourself. If you feel guilty about making purchases for yourself, cashing in rewards may be a treat for YOU.


Let’s face it; it’s much more cost-effective for a company to retain customers than it is to acquire new ones. With all the marketing and advertising dollars that go into generating new customers, it’s easier to promote your products to current customers who are already familiar with your products and services. What better way to increase customer loyalty than to entice them with rewards?

With this tactic, the company potentially gains:

  • Brand loyalty. If you’re committed to the rewards, you’re committed to the company. (You may even become a brand-advocate. By sharing it with family and friends, you can spread some positive word-of-mouth for the company!)
  • Greater market-share. If customers are loyal to one brand, they’re shopping the competition less!
  • Additional purchases. If you’re close to earning your “rewards,” you may be more likely to spend a little extra to get it. (Counterintuitive? Maybe, but smart marketing! Put on your “smart consumer hat” and recognize you’re not really saving if you’re spending more than you intended or budgeted.)
  • Customer insight. If you’re scanning your card, the company is tracking your purchases, and thus, your spending habits. They now know what products you prefer, and they can guesstimate what products you may purchase in the future. They’re able to target offers specifically toward your buying patterns. Once you scan your card, your information goes to a customer database where they use predictive technology in an attempt to use the data to increase value and loyalty.

Protecting Your Identity
So we know what you and the company gain, but what could you be losing? Well, you’re basically trading your identity for a discount. There is a huge market for trading information with partner companies. (Have you ever gotten a direct-mailing from a company you’ve never done business with before—but they seemed to know your “needs?” Has your information been sold? Maybe.)

What can you do to protect your consumer-identity?

  • Ask the company what they do with your personal information. If they can offer it to affiliate companies, is there a way to opt-out?
  • Change your passwords and personal contact information if the card has been stolen. Having your loyalty card stolen is not nearly as bad as having your credit card stolen, but they may not be as secure as we hope. Better safe than sorry!
  • Provide as little information to the company as possible. If the company requests confidential information you’re not comfortable revealing, don’t get the card.

How Do You Manage So Many Reward Cards?
There’s an app for that! There are several free loyalty apps to manage your reward cards. Through these apps, you can also receive e-coupons delivered right to your smartphone.

Whether you’re a fan of loyalty card programs or not, chances are they’re here to stay. By managing them wisely, you can make them work for you! Separate true rewards from clever marketing strategies by being an alert-consumer and knowing what’s on your keychain!

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