Why do stores give loyalty points?
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The Trick: What do stores mostly get from loyalty points?
Your purchase data and more of your visits. Points are payment for data and habit: the card tells the store what you buy, which fuels targeted offers. Source: Wikipedia – Loyalty program
Why It Works: Why do points make us shop more?
Progress toward a reward pulls us to finish. The goal-gradient effect: people speed up as they near a reward, like a coffee card with stamps. Source: Kivetz, Urminsky & Zheng – The Goal-Gradient Hypothesis Resurrected (JMR, 2006)
How to Spot It: How do you know points are steering you?
You choose a store or item just to earn or keep points. If points change where you'd shop on price alone, they're working on you. Check the cash value. Source: Wikipedia – Loyalty program