Loyalty programs are shifting from rewarding customers to collecting data for “surveillance pricing,” per The Washington Post. Starbucks tracked every purchase and click, leading to concerns about individualized pricing. Companies like Kroger also use data to tailor discounts, potentially disadvantaging lower-income customers.

Experts warn that loyalty programs are becoming “backdoor laboratories for pricing,” with companies using data to predict consumer behavior. Consumers are urged to be vigilant about retail practices, review data privacy settings, and track savings to regain control. Regulators may need to step in to protect consumer privacy and curb data exploitation.

As companies increasingly leverage data to predict consumer spending behavior, the true cost of loyalty programs may be higher than consumers realize. Loyalty programs now provide companies with detailed insights into consumer behavior and purchasing power, potentially leading to higher prices for certain customers.

Read more at Yahoo Finance: Rewards programs are turning into data-harvesting machines. Why companies now profit more from your habits than you do