Why are grocery stores and retailers so focused on loyalty cards and apps?

While these programs are marketed as a way to reward repeat customers with discounts, their primary purpose is to collect "first-party data." This data allows retailers to build deep profiles of your identity, income, and lifestyle. By tracking every transaction, retailers can transform from traditional sellers of goods into high-margin media companies. In fact, profit margins for retail media networks can reach 60% to 80%, which is significantly higher than the razor-thin margins typically found in grocery retail.

What kind of information is included in my "digital twin" profile?

Retailers collect more than just your name and address; they use predictive analytics to create a "digital twin" that includes your demographic information, estimated income bracket, and "lifestyle inferences." For example, buying certain vitamins or unscented lotions can flag a pregnancy before you’ve even announced it. These profiles can also include your "dwell time" in specific aisles and your visit frequency. This information is then sold to third parties, including data brokers, insurance companies, and even automotive brands.

How does "surveillance pricing" or "dynamic pricing" affect what I pay?

Privacy advocates are concerned that retailers use your data to manipulate the discounts you see. Instead of everyone getting the same sale price, algorithms may determine the "minimum" discount needed to get you to buy a product. If a profile suggests you are a "loyal" shopper who will buy a brand regardless of price, you might receive fewer coupons than a "switchable" customer. There is also a risk that "income predictors" could lead to discriminatory pricing, where discounts are withheld based on your perceived financial status.

Can I opt out of this data collection while still using loyalty programs?

It is difficult to opt out entirely while still receiving discounts, but you can "limit the harvest." You can use an alias email address for rewards programs, disable "always-on" location tracking in store apps, and turn off Bluetooth features that track your movement through aisles. If you live in a state with privacy laws like California or Oregon, you can legally request to see your data or opt out of the sale of your personal information. For the highest level of privacy, shopping with cash and refusing to scan a loyalty card makes you "invisible" to the network, though you will likely pay the higher "non-member" price.

Why would a bank or a phone company want to start a media network?

Any company with a direct financial relationship and a large user base can monetize "commerce media." Banks like Chase and payment platforms like PayPal can see exactly where and when you spend money, allowing them to sell highly accurate "segments" to advertisers. For example, if your bank data shows you bought a plane ticket, they can sell that insight to hotel chains. This "first-party" data has become more valuable as traditional web tracking, like third-party cookies, is phased out.

The Hidden Cost of Loyalty Cards

35 min

26 sources

Mar 17, 2026

Technology Business Society

Discover how retailers turn your grocery habits into a data gold mine, with advertising revenue set to outpace television by 2028.

Best quote from The Hidden Cost of Loyalty Cards

The real story is that your data has become a lucrative product in itself. For some of these giants, the physical goods are almost like a low-margin necessity to fuel a high-margin data business.

This audio lesson was created by a BeFreed community member

Input question

How companies like lowes and grocery stores make more money off your loyalty cards than your actual shopping

Host voices

Lena

Blythe

Learning style

Deep

Knowledge sources

Frequently Asked Questions

From Columbia University alumni built in San Francisco

BeFreed Brings Together A Global Community Of 1,000,000+ Curious Minds

See more on how BeFreed is discussed across the web

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

483

"Makes me feel smarter every time before going to work"

@Cashflowbubu

From Columbia University alumni built in San Francisco

BeFreed Brings Together A Global Community Of 1,000,000+ Curious Minds

See more on how BeFreed is discussed across the web

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

483

"Makes me feel smarter every time before going to work"

@Cashflowbubu

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

483

"Makes me feel smarter every time before going to work"

@Cashflowbubu

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

483

"Makes me feel smarter every time before going to work"

@Cashflowbubu

1.5K Ratings4.7

Start your learning journey, now

The Hidden Cost of Loyalty Cards

35 min

26 sources

Mar 17, 2026

Technology Business Society

Discover how retailers turn your grocery habits into a data gold mine, with advertising revenue set to outpace television by 2028.

Best quote from The Hidden Cost of Loyalty Cards

The real story is that your data has become a lucrative product in itself. For some of these giants, the physical goods are almost like a low-margin necessity to fuel a high-margin data business.