From hotels to fast food restaurants, more companies are luring consumers to sign up for loyalty programs in exchange for points, discounts and other deals. But according to two former FTC officials, loyalty programs have devolved into “data-harvesting machines” that track what we buy and even how much we’re willing to pay. And the financial benefits tend to fall far short of the initial promise. We talk to Sam A.A. Levine and Stephanie Nguyen about how loyalty programs exploit consumers, how California is fighting back and how we can stay alert to the pitfalls. Their recent paper is called “The Loyalty Trap: How Loyalty Programs Hook Us with Deals, Hack Our Brains, and Hike Our Prices.” What consumer loyalty programs do you use, and have you ever felt used… by them?
Guests:
Samuel A.A. Levine, former director, Bureau of Consumer Protection, Federal Trade Commission - senior fellow, Center for Consumer Law & Economic Justice, UC Berkeley Law School
Stephanie Nguyen, former chief technologist, Federal Trade Commission - senior fellow, Vanderbilt Policy Accelerator
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