The Shady Way Grocery Store Loyalty Programs Benefit From Your Shopping Trips

In an era of skyrocketing supermarket prices, any way to shave a few bucks off ever-increasing grocery bills is more than welcome. As such, many of us have phone folders chock full of grocery store loyalty apps offering discounts and coupons to regular customers. These programs can sometimes save shoppers a bit of money (if you can decipher the often convoluted rewards systems and remember to apply the coupons when checking out). However, there's no such thing as free lunch, and grocery store loyalty programs are no exception. Most of these programs simply claim to improve customer experience and reward loyal shoppers, but that's far from the whole story.

When customers sign up for a grocery store's loyalty program, they hand over a wealth of personal data, and supermarkets aren't shy about exploiting that information to turn a profit. In addition to using data collected via loyalty programs to offer strategically targeted discounts and shadily get shoppers to spend more money, many grocery stores turn around and sell your personal data to dozens of other companies for a chunk of change. This is especially concerning because, although grocery store loyalty cards have been around for decades, the advent of apps — which can track more sensitive details like location and payment information — has made it much easier and more profitable for supermarkets to exploit loyalty program data.

Almost every grocery store seems to have an app these days (leading many to question how many loyalty programs is too many), but some are far shadier than others when it comes to collecting and exploiting customer data. America's oldest grocery store chain, Kroger, is one of the worst offenders. A 2025 Consumer Reports investigation revealed that Kroger uses data collected through its loyalty program to create consumer profiles and offer personalized coupons. This might not sound so sinister until you learn that this includes things like attempting to gauge customers' earnings, so that the best deals may be saved for shoppers perceived as wealthier and more educated. 

Unsurprisingly, Kroger also sells customer data to a plethora of companies, including many in the financial, marketing, and healthcare industries. And we're not talking about chump change here – Consumer Reports estimates that Kroger made over half a billion dollars from these dubious data practices in 2024 alone.

Although more has been revealed about Kroger's less-than-kosher use of loyalty program data, the chain certainly isn't the only offender. As tempting as loyalty program savings can be, it's important to stay vigilant and pay attention to what information you're handing over. If you're sick of having to submit to shady data collection in exchange for a paltry discount, you might consider taking your business to Trader Joe's, which doesn't have a loyalty program (and probably never will).