Why loyalty programs hook customers

All those loyalty points you’re racking up at the grocery store, hotels and airlines benefit those companies way more than you. Samuel A.A. Levine is a senior fellow at U.C. Berkeley’s Center for Consumer Law & Economic Justice and he previously served as director of the FTC’s Bureau of Consumer Protection. He joins host Krys Boyd to discuss why newcomers to loyalty programs get priority over long-time customers, the privacy we trade off to get what we think are deals and why we might encounter higher prices anyway. His paper (co-authored by Stephanie T. Nguyen) “The Loyalty Trap: How Loyalty Programs Hook Us with Deals, Hack our Brains, and Hike Our Prices” was published by The Vanderbilt Policy Accelerator and U.C. Berkeley Center for Consumer Law and Economic Justice.