Last Updated Mar 22, 2011 12:01 PM EDT
Over the years I have accumulated scads of them -- from supermarkets, bookstores, druggists, gas stations and car washes, not to mention pizzerias and pet stores. Lately, even outfits providing personal care have jumped into the act. My manicurist, for example, offers a discount of some kind after I log ten visits. And the beauty salon I frequent stamps a card every time I make an appointment in advance. After a specified number, I get something or other from them -- I'm not sure what. (I'm hoping for 20 percent off a face-lift.)
Apparently I am not alone in my confusion. A new study from ACI Worldwide, a provider of electronic payment software, found that although three out of four Americans over age 18 have at least one loyalty card (20 percent have more than five), 81 percent say they don't know the benefits of the program or how or when they will receive rewards.
Most of the people polled by ACI -- some 62 percent -- enroll because they are hoping for discounts. But only 36 percent received a reward that made them come back to the store, and 25 percent say that the reward or promotion was for something they would never buy. That reminds me of my experience with the Borders loyalty program. After I bought books at the store, Borders emailed me coupons for bodice-ripping romances and Westerns, which I never read. Twenty percent of those polled said they had a negative experience with a loyalty program. I know I have -- like when I carried around a grubby card for two years that entitled me to a free car wash after 12 visits only to learn when I triumphantly pulled it out of my wallet to collect my due, that it had expired six months earlier.
Who is to blame? Mostly retailers, says Rob Seward, senior marketing manager for ACI Worldwide, who "are missing the mark when it comes to reaching out to consumers with information and offers that are relevant." For one thing, he points out, retailers don't always bother explaining their program's benefits. "I belong to a pet store loyalty program, and for years I've been sliding my card through, but I had absolutely no idea what I was getting," he says. After he bought stuff at a competing pet store, however, he found an email when he got home offering him a 20 percent discount on his next purchase -- a much more salient benefit. Another gripe: unless a consumer gets a punch card showing him when he gets the free pizza or latte, he has no idea how far along he is toward winning a reward. Stores could put information on a customer's receipt indicating how many points he's accumulated or how close he is to that free dog bed, Seward adds. Ideally, merchants should dig into databases of purchasing histories and tailor rewards to customer preferences.
I've never been a big fan of the programs. Call me scatter-brained, but even when I'm carrying the loyalty card, I forget to pull it out. And, if the clerk prompts me, I can't find the thing because it's lost among a canasta deck of cards for frequent dog-grooming, shoeshines and lattes. I often wish that retailers would forget about frequent-buyer points and simply lower prices.
Retailers who want to fix up their loyalty programs may want to hire a company like ACI Worldwide which claims it can target rewards to consumers' purchasing histories. But while merchants futz around, what are we hapless customers to do? Well, I would say that if you are concerned about privacy, then don't join the programs because you don't want anybody digging your records for buying booze or pornographic movies (which can be subpoenaed by law enforcement, if it comes to that). If you do belong, Seward suggests that you "dust off the literature you got when you signed up and read it so you can take advantage." And you may as well because one way or another, you're already paying for the loyalty program in higher prices.
More on MoneyWatch