A loyalty scheme presents itself as a reward for shopping regularly, and its primary function is to attach an identity to every basket. The discount buys the connection.
Anonymous transactions are nearly useless
Without identification a retailer knows what sold and when, but cannot tell whether one person bought weekly or many people bought once.
Linking baskets over time reveals household composition, dietary patterns, brand loyalty, price sensitivity and the point at which a customer stops shopping there.
That longitudinal view is the asset, and no amount of aggregate sales data substitutes for it.
The discount is calibrated, not generous
Reward rates are typically small as a proportion of spend, and the cost is partly funded by suppliers paying for promotions targeted at specific customer segments.
Because members shop more and switch less, the scheme frequently pays for itself in retained revenue before any data value is counted.
Two-tier pricing, where the shelf price is higher for non-members, shifts the framing further: the discount becomes the normal price and shopping anonymously carries a penalty.
Personalised offers are a pricing instrument
Coupons issued to individuals allow a retailer to discount selectively for customers who would otherwise not buy, while charging full price to those who would.
The system also identifies customers drifting towards a competitor and issues offers to interrupt that pattern before the relationship is lost.
None of this is possible with a shelf-edge promotion, which necessarily gives the discount to everyone including those already committed.
Suppliers buy access to the insight
Manufacturers want to know who buys their products, what else those shoppers buy and how a competitor's promotion affected them.
Retailers sell that analysis, and in some markets the media business built on loyalty data has become a substantial profit line in its own right.
The retailer therefore has two customers for the same dataset: itself, and the brands on its shelves.
What members are actually agreeing to
Terms typically permit analysis, personalisation and sharing with partners in defined forms, and members consent when they join rather than at each use.
Data protection rules in many jurisdictions grant rights to access, correct and delete the record, and to object to profiling, though few members exercise them.
The exchange can be entirely reasonable, but it is an exchange, and describing it as a reward obscures which side is receiving the more valuable item.