How rewards programs trick their most loyal costumers

KERA's Think

KERA

Society & Culture, 071003, Kera, Think, Krysboyd

4.8 • 861 Ratings

🗓️ 2 December 2025

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

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Summary

All those loyalty points you’re racking up at the grocery store, hotels and airlines benefit those companies way more than you. Samuel A.A. Levine is a senior fellow at U.C. Berkeley’s Center for Consumer Law & Economic Justice and he previously served as director of the FTC’s Bureau of Consumer Protection. He joins host Krys Boyd to discuss why newcomers to loyalty programs get priority over long-time customers, the privacy we trade off to get what we think are deals and why we might encounter higher prices anyway. His paper (co-authored by Stephanie T. Nguyen) “The Loyalty Trap: How Loyalty Programs Hook Us with Deals, Hack our Brains, and Hike Our Prices” was published by The Vanderbilt Policy Accelerator and U.C. Berkeley Center for Consumer Law and Economic Justice.

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Transcript

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0:00.0	Have you heard about OMG? Yes. This is a website the New York Times wirecutter featured as one of their most popular gifts. And for good reason, it presents new findings from the largest ever research study into women's pleasure and intimacy. In partnership with researchers at Yale and at Indiana University, they asked tens of thousands of women what they
0:21.6	wished they and their partners had discovered sooner. They found the patterns in those
0:26.2	discoveries and all that wisdom and intimacy is organized as hundreds of short videos,
0:31.6	animations, and how-toes. When you see OMG, yes, you might understand why wirecutter recommended it.
0:38.2	It is warm, honest, and has regular women talking about real experiences.
0:42.7	It's truly eye-opening.
0:44.8	See for yourself at omgyes.com.
0:47.3	That's OMGS.com. There are games you can download to your phone that are free to play but contain in-app purchases.
1:04.2	You might be asked to pay like 20 bucks for whatever pretend currency the app uses to sell, say, a better outfit for your avatar.
1:12.0	This has always struck me as a complete waste of money, not least because the value of that
1:17.0	pretend currency is completely arbitrary. The cost of your character's new look is set up by
1:22.6	the app designer and peg to exactly nothing. It cannot be used anywhere but in that game, and those coins you
1:29.2	bought can lose value without notice at any time. So then why am I such a sucker for hotel points?
1:35.7	From KERA in Dallas, this is Think. I'm Chris Boyd. However they are organized as miles or points
1:42.5	or status, loyalty programs are set up like video games to maximize our engagement and discourage us from walking away for fear of losing out.
1:51.8	They help themselves to a whole lot of our personal information in the process.
1:56.0	And here's the kicker. Regardless of how they are marketed, many of them save the best deals for newcomers while they
2:02.2	figure out exactly how little they can do for longtime customers without losing business.
2:06.5	And my guest believes these are things we deserve to know.
2:10.0	Samuel A.A. Levine is a senior fellow at UC Berkeley's Center for Consumer Law and Economic Justice,
2:16.1	who previously served as director of the Federal Trade Commission's Bureau of Consumer Protection.
2:21.1	The Center for Consumer Law and Economic Justice, along with the Vanderbilt Policy Accelerator, produced the report we'll be talking about today.
	...

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