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It's more than that.
The original purpose of loyalty cards, or at least the purpose that is commonly known, is customer retention. Clubcard is a perfect example of this. To earn clubcard points, you need to spend money at Tesco, to get certain discounts, you need a clubcard. Customer data is one thing, but customer retention is another.
to get certain discounts, you need a clubcard.
This part is relatively new, Tesco were the first to do it but 5 years ago the normal offers were available for everyone regardless of loyalty card. But clubcard has existed for a long time before then - there were discounts and money off to be had though, through clubcard points.
That's why. They can use them for all sorts of tracking and pair the data up with any data that they buy from other places. Also, many 'loyalty' cards - e.g. Tesco's one, only works really against the consumer as the customer is penalised for not having it. The prices only drop to normal prices when the card is used, with the higher price for those without a card.
Hands up, I haven't watched this video, but I guess it will explain better than anything I can - https://www.youtube.com/watch?v=psta0qkwk7M
Appcard was developed by "Goldfinger," an Israeli residing in Israel, who also developed ICQ, iirc.
I mean, why bother with the loyalty card? Can't they just track the payment (debit, credit) card?
The loyalty card lets them track cash payments made by you as well.
You could have multiple cards; idk how it works for the US but maybe they cant see the card owner? So if a loyalty card is used with two credit cards it is useful to know it's most likly the same family or even the same person?
Wild speculation
Even if they can see the owners name it's not like they're unique. Although doing simple correlation wouldn't be that difficult.
Other than bits already mentioned by others, the data they gather from your card payments is not theirs to sell. Yes, they can connect your card to receipts and know what you buy, when, where etc - but officially, they're not meant to keep/process/sell that data.
If you get a "Tesco Clubcard" or whatever, you formally agree to any and all data gathering, and Tesco own that data and can do what they want with it.
These days I think it's so they can retain price sensitive consumers (cheap and/or poor people), while making the maximum profit from price insensitive consumers (dumb and/or rich people) who wont bother to use one so will pay full price.
In the states the company running the payment system (Visa, Mastercard etc) is a separate company than the supermarket and so they can’t necessarily group together all the purchases a single customer makes, let alone if they pay cash
Imagine a taxi driver, he might overhear your name and the address you’re going to, but that doesn’t mean he can go look up every taxi trip you took,
Now if you have a loyalty card there’s a single identity to group and market towards
Now take this all with a grain of salt, your system may be different, but the technique spread across markets
So the supermarket can't see your card details?
Hmm. They print out a receipt with everything I bought that trip. They can connect that to the card I used to pay. How do they not have all the purchases I make?
I think the loyalty card is just about pushing ads and "deals", and selling our data.
I don't use them, nor the apps, or any of that. I go to the store and buy my groceries once a week. I block ads everywhere. So, while they have the data, they don't have a path back to my brain, so I don't see whatever they're doing with it.
Correct me if I’m wrong but Apple Pay, (not sure about Android Offerings), randomises the card number on every purchase.
This makes it difficult for companies to track you hence why they want you to scan the loyalty card.
I’ve been using my parents’ and colleagues’ loyalty cards instead. While I don’t get the points I do get the discount.
This, you can also just ask people at the till and someone will be happy so scan their card like 95% of the time.
Of course, this shouldn't be necessary to get the normal prices they are now dressing up as discounts.
It's funny when you ask a member of staff, they get all flustered because they're not allowed to let customers use their personal loyalty cards.
Purchase information track, contact information as they requested address, phone, email, but didn't verify in most cases. This could be used for targeted marketing or just mailing flyers.
There’s basically a psychological value in making you jump through hoops with a loyalty card to get the discount, otherwise they may as well just cut out the whole charade and just make the products slightly cheaper instead.
Might be in the title. Loyalty....
This. We use our loyalty card scheme primarily to get people to shop with us than anyone else
in the us there was a service which did this but it never took off.