Rewards programs are turning into data-harvesting machines. Why companies now profit more from your habits than you do

Core Insights - Loyalty programs are shifting from rewarding customers to employing "surveillance pricing," which may penalize loyal consumers instead of benefiting them [1][5] Group 1: Surveillance Pricing - The concept of "surveillance pricing" involves collecting extensive consumer data to create individualized pricing, which can lead to different prices for the same product based on customer behavior [3][5] - A report by the FTC indicates that factors such as location and browsing history can influence pricing strategies, raising concerns about fairness in loyalty programs [3][5] Group 2: Customer Experience - A technology columnist's experience with Starbucks revealed that frequent visits resulted in fewer promotions, suggesting that loyal customers may not receive the best deals [2][4] - Starbucks utilizes an AI tool named Deep Brew to analyze customer data, which may lead to assumptions that frequent customers will pay full price, resulting in unequal pricing for similar products [4] Group 3: Industry Implications - Former FTC officials warn that loyalty programs are becoming "backdoor laboratories for pricing," using large datasets to infer customer characteristics and tailor discounts accordingly [5]