KERA's Think How rewards programs trick their most loyal costumers
Dec 2, 2025
Samuel A.A. Levine, a senior fellow at UC Berkeley focusing on consumer law, joins the discussion to reveal the hidden costs of loyalty programs. He explains how these programs prioritize new members, often at the expense of long-time customers. Levine discusses the extensive data companies collect, the risks of privacy invasion, and the subtle tactics used to keep consumers hooked, such as gamification and coercive upselling. He also highlights the potential for point devaluation and the need for better consumer protections in an evolving digital landscape.
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Loyalty Programs Are Gamified Traps
- Loyalty programs are gamified to maximize engagement and discourage leaving by leveraging our fear of losing out.
- Companies reward data collection and repeat visits more than genuine reciprocal loyalty.
Loyalty Data Is Far More Than Purchases
- Companies collect broad, sensitive data beyond purchases, including geolocation and inferred traits like ethnicity.
- That data fuels targeted marketing and can be sold to data brokers as a revenue stream.
Think Twice Before Giving Your Phone Number
- Resist impulse signup offers that demand your phone number or app download for instant discounts.
- Treat those signups as data agreements that likely permit broad tracking and sharing.