Loyalty program

[8] American Airlines no longer sends membership kits to new members of its frequent flyer program.

Once customers earn a specific number of points, they can enter a new level with higher discounts and exclusive products.

There is also a free tier which does not offer such discounts but does allow members to collect virtual "stamps" (i.e. loyalty points).

[11] Depending on the program, rewards may take the form of: In addition to rewards, loyalty cards were may also be used identify consumers for benefits and other services, e.g.: Programs with cashback features give customers a portion of the money that they have spent with a business (usually a defined percent which may be higher than usual during promotions).

Depending on the program, ways that consumers may access their loyalty account (account number, promotions, other information) may include: There has been a move away from traditional magnetic card, stamp, or punchcard based schemes to online and mobile online loyalty programs.

While these schemes vary, the common element is a push toward eradication of a traditional card, in favour of an electronic equivalent.

Some prominent examples are Austrian based mobile-pocket established in 2009, the US-based Punchd (discontinued from June 2013,[13]), which became part of Google in 2011.

In addition, multiple emulated cards can be stored in a smartphone to support multi-merchant loyalty programs.

[26][27] Loyalty programs' most important benefit to merchants is that they generate data, which bring more repeat business and therefore increase sales.

A 2015 study found that most supermarket loyalty cards in the United States do not offer any real value to their customers.

[97] Furthermore, commercial use of customers' personal data – collected as part of loyalty programs – has the potential for abuse; it is highly likely that consumer purchases are tracked and used for marketing research to increase the efficiency of marketing and advertising, which is one of the purposes of offering the loyalty card.

[98][99] For some customers, participating in a loyalty program (even with a fake or anonymous card) funds activities that violate privacy.

[102] Employees who need to buy something (such as an airline flight or a hotel room) for a business trip, but who have discretion to decide which airline or hotel chain to use, have an incentive to choose the payment method that provides the most cash-back,[103] credit-card rewards or loyalty points instead of minimizing costs for their employer.