Disadvantages of Loyalty Programs

Of course everything that has benefits, also has its downs. Which seems to be the case for loyalty programs as well. Many customers think its all paradise when they go shopping and obtain their savings. That really is not the case as most of these businesses have a third party company that manages them. These third party companies hold our information such as our names, date of birth, addresses, etc. Our privacy is not given any protection as these companies track all our movements as to where we shop, what we buy, and our spending habits.
Another disadvantage is that there is a limit on transferring the points between family and friends. It is very difficult to do such a thing and many customers might not be attracted by this.
Furthermore, customers complain that the availability and variety of prizes are not that good. Customers obviously want more, and what a business is offering might not be of taste to the consumer.
Some people say that Loyalty programs are used to lure more consumers into spending more money. More consumers are tempted to use their loyalty cards to spend their disposable income.
All in all, loyalty programs have its ups and downs but its up to you at the end of the day to use it or not.

Source: http://www.iamloyal.co.uk/blog/most-loyalty-programs-annoy-me

http://gtaggar.blogspot.ca/2012/02/disadvantages-of-customer-loyalty.html