How Loyalty Programs Manipulate Consumers and Steal Personal Data

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KQED

News, Politics, News Commentary

4.2 • 726 Ratings

🗓️ 17 December 2025

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

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 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	If you had the smartest Wi-Fi, it'd be Xfinity.
0:05.0	It would boosts to the devices that needed them most,
0:08.0	and to protect you from threats at home and online.
0:11.0	Xfinity. Imagine that. Restrictions apply.
0:15.0	This festive season of McDonald's...
0:17.0	Grinched deals every day.
0:18.0	Okay, okay.
0:19.0	With a sausage sandwich for just... Let's see, 9-N-P?
0:21.8	Six chigget-McNuggets for just... Nine-N-Ap! Fine. Get Grinch deals every day in the McDonald's app. 18 plus app only. Ends 24th of December. One use per offer. Free supply to delivery. Participation varies. Tees and Cs apply. Welcome to FOMED.
0:38.9	Welcome to Forum. Iation varies. Tise and C apply. From KQED.
0:39.0	Welcome to Forum. I'm Mina Kim.
0:41.7	Chances are, as you've been holiday shopping, you've given away your personal information
0:46.1	or joined a rewards program in exchange for a discount.
0:50.0	Loyalty programs are everywhere, providing benefits for repeat customers or continued engagement,
0:55.9	and they can feel like welcome relief in tight economic times.
0:59.9	But according to my guests, they've also become data harvesting machines where companies watch us, sort us, and ultimately charge us, not the same as everyone else, but the maximum price they think will pay.
1:13.9	Sam Levine is Senior Fellow at the Center for Consumer Law and Economic Justice at UC Berkeley Law School,
1:20.0	and Stephanie Wynn is Senior Fellow at Vanderbilt Policy Accelerator.
1:23.3	They're both former officials with the Federal Trade Commission under Biden
1:26.6	and authors of the paper The Loyalty Trap,
1:29.7	how loyalty programs hook us with deals, hack our brains, and hike our prices.
1:34.6	Sam Levine, welcome to forum.
	...

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