Loyalty program illusion—inflated expectations meet minimal savings

Loyalty programs seem like a great way to save money with seemingly no drawbacks. 90% of businesses offer such programs1, but are they worth it? To answer this question, we looked at popular companies offering loyalty programs and surveyed 1,000 Americans about loyalty programs to understand customers’ expectations versus the actual savings.

The findings of the research and survey reveal that consumers may have inflated expectations when it comes to loyalty program savings.

Key findings

  • For every $100 spent, loyalty program members can save the equivalent of a single sock or 4 espresso shots.
  • People estimate they save $56 per month through loyalty programs—in reality, you would have to spend $2,240 at H&M, $1,200 at Starbucks, or $281 at McDonald’s to save $56.
  • 10 popular companies offering loyalty programs collect at least 7 different categories of user data.
  • 8 out of the 10 popular loyalty program providers studied sell user data to third parties.

How much value do you really get from loyalty programs?

Companies use clever advertising to make loyalty programs appealing to customers, often offering freebies based on your spending. But what do you actually get in return?

Here’s what you can save through 3 popular loyalty programs:

  • At Starbucks, you can get 4 additional espresso shots for every $100 you spend through their loyalty program. That amounts to 4.6 cents for every dollar spent. 
  • For every $100 spent at McDonald’s, their loyalty program gives you 6.7 “free” cheeseburgers. That means you earn back 20%, or 20 cents, for every dollar spent. 
  • Out of the companies we analyzed, H&M offers the lowest savings. After spending $100, you earn $2.50 of in-store credit. Roughly the cost of a single sock from a pair. 

How many people participate in loyalty programs?

We surveyed 1,000 Americans about their interaction with loyalty programs. We included three generations in our survey—Gen Z, Millennials, and Gen X—with each of the generations accounting for a third of the sample. 

We found that most respondents (81%) participate in loyalty programs. Among those, the biggest proportion (38%) of respondents, across all generations, participate in 1 to 2 loyalty programs, while 43% participate in more than 2.

How much do loyalty programs save? Perception vs reality

On average, our respondents estimated that loyalty programs save them $56 per month. Millennials were the most optimistic, followed closely by Gen Z, with Gen X trailing behind. Unfortunately, all the estimations are way off.

Each month, you would have to spend $2,240 at H&M, $1,200 at Starbucks, or $281 at McDonald’s to save $56. Or, in other words, you’d have to be a very loyal customer.

How much data do 10 popular companies offering loyalty programs collect?

We analyzed the privacy policies of 10 popular companies offering loyalty programs and checked whether they collect personal information that fits into the 12 categories defined by the CCPA. Our analysis focused on California because the legal terms in the CCPA are the most clearly defined. In cases where the company does not have a separate loyalty program privacy policy, we analyzed the company’s general privacy policy.

We found the following insights regarding data collection:

Each company we analyzed collected data from at least 7 categories. However, the worst offenders were Verizon, collecting all 12 data points, and American Express, with 11. They were followed closely by Home Depot, CVS, and Walmart, with each collecting personal data from 10 categories

While customers might expect businesses to collect identifiers (such as usernames or passport numbers) or commercial information (such as records of personal property and purchasing histories), they may be surprised to find that 8 out of 10 of the popular companies we analyzed collect characteristics of protected classifications (such as sexual orientation and political affiliation). The fact that these data collection practices appear across companies doesn’t mean we have to be comfortable giving away such information.

5 out of 10 companies collect biometric information, which can include things like fingerprints, voiceprints, and retina scans. And 3 out of these 5 companies (Verizon, CVS, and Home Depot) collect sensitive personal information such as racial or ethnic origin or even genetic data. 

While most of the companies collect the data themselves, CVS and McDonald’s disclose that they also obtain user data from data brokers. This raises even more privacy concerns as data brokers scrape personal information from a variety of sources, including social media, official records, and even undisclosed private sources.

Some companies even disclose that they sell their customers’ data to third parties.

8 of the 10 companies we analyzed admit to selling user data to third parties. The only companies from the list that do not sell user data are Shell and American Express. So the companies offering loyalty programs have more to gain than many people would assume.

Are consumers comfortable sharing their data?

We asked our survey respondents how they feel about sharing their data, and 43.3% of all respondents said they were comfortable with their data being shared with third parties (Millennials and Gen Z more so than Gen X). Meanwhile, only 25.8% said they were uncomfortable. However, the sense of comfort may be misguided. 

Cybercriminals rely on data to commit fraud, making companies that hold large data sets big targets for hackers. In 2022, there were 23.5 million leaked accounts4 and 1 million cases of identity theft5 in the US alone. So the more companies that collect your personal information and the more third parties they share that data with, the greater your cybersecurity risks.

Are loyalty programs worth it?

While it’s still up to each individual to decide whether a loyalty program is worth subscribing to, on the whole, loyalty programs likely don’t live up to expectations. There seems to be a disconnect between how much people think they save versus how much they actually do. The bottom line: consumers think they save $56 but would really have to spend hundreds (sometimes thousands) of dollars a month to reach such savings. 

Not only that, but many companies offering loyalty programs also collect and sell user data to third parties. While our study did not include an analysis of data collected through loyalty programs specifically, all loyalty programs require the disclosure of several data points, such as name or email address. 


On May 8th, 2023, Incogni surveyed 1,000 Americans, with a relatively even split between demographics—333 respondents were 18–26 years old (Gen Z), 334 were 27–42 years old (Millennials), and 333 were 43–58 years old (Gen X).

The survey included five questions:

  1. How many loyalty programs do you participate in?
  2. How much do you estimate you save on a monthly basis due to loyalty programs? ($/month)
  3. How important are discounts and benefits, provided by loyalty programs, to your purchasing decisions?
  4. How comfortable are you with loyalty program providers sharing the data they collect with third parties?
  5. If a company offered to pay you for access to your personal data, what would be a fair amount for them to offer? ($/month)

Incogni’s researchers also analyzed the privacy policies of 10 popular companies. They noted whether the privacy policies disclosed collecting data in any of the 12 information categories defined in the CCPA, whether the companies collect data from data brokers, and whether they sell or share the data they collect (per the definitions provided in the CCPA).   

Note on analysis:

We removed outlier responses from the survey for questions 2 and 5. The outliers were determined using the IQR * 1.5 method. 

The data used in this research is available here: Public dataset


  1. Morgan, Blake. “50 Stats That Show the Importance of Good Loyalty Programs, Even During a Crisis.” Forbes, May 7, 2020. Accessed June 13, 2023. https://www.forbes.com/sites/blakemorgan/2020/05/07/50-stats-that-show-the-importance-of-good-loyalty-programs-even-during-a-crisis/?sh=836a0d424106#:~:text=More%20than%2090%25%20of%20companies%20have%20some%20sort%20of%20loyalty%20program.%20(Accenture).
  2. Kauffman, Dave. “Data: The New Oil of the Digital Economy.” Wired, July 9, 2014. Accessed June 13, 2023. https://www.wired.com/insights/2014/07/data-new-oil-digital-economy/.
  3. “Global Data Broker Market – Forecasts from 2020 to 2025.” Knowledge Sourcing Intelligence, n.d. Accessed June 13, 2023. https://www.knowledge-sourcing.com/report/global-data-broker-market.
  4. “Data Breach Recap 2022.” Surfshark Blog,  n.d. Accessed June 15, 2023. https://surfshark.com/blog/data-breach-recap-2022.
  5. “Facts + Statistics: Identity Theft and Cybercrime.” Insurance Information Institute, n.d. Accessed June 13, 2023. https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime.
  6. Wong, Kevin. “91% of People Agree to Terms of Service Without Reading.” Business Insider, November 13, 2017. Accessed June 13, 2023. https://www.businessinsider.com/deloitte-study-91-percent-agree-terms-of-service-without-reading-2017-11.
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