The Disadvantages of Loyalty Cards

A loyalty card offers a shortcut to store discounts, coupons and special incentive programs. In most cases, the programs are free and all you have to do is provide information, such as your name and email address. However, loyalty cards aren't necessarily the cure for financial ills, and some consumers feel that these cards violate privacy or result in too much marketing spam.

Setting up a loyalty card account can take a few minutes. Once you have the card, you'll need to give it to the store every time you make a purchase to get discounts and coupons. While fishing for a card can take only a few seconds, if you're in a rush this can prove inconvenient. Some stores allow customers to provide a telephone number when they forget the card, but this process also takes some time and requires giving your phone number to someone you don't know.

You almost always have to give out some personal information – such as your full name, email address or phone number – to sign up for a loyalty card program. Businesses use this information in a wide variety of ways. They may sell your information to third parties, use your information to track consumer behavior or track your purchases and send you personalized coupons. If you're concerned about your privacy, the risk may not be worth the rewards, particularly if the company with which you have a loyalty card isn't meticulous about securing customer data.

When businesses sign you up for loyalty card programs, they have a strong incentive to use your data to send you marketing material. You might receive emails, mail or phone calls. Depending upon company policies and practices, you could receive numerous contacts in a single day. Be sure to ask how the company will use your information and whether you can opt out of email or advertising material before you join a program.

For some customers, the amount they save with loyalty cards isn't worth the hassle of giving out personal information. Loyalty card programs vary significantly. Some stores offer reduced prices on a wide variety of items to loyalty card members. Others simply send coupons to frequent shoppers. You'll need to review the terms of the program you're interested in to decide if it's worth your time and effort.