Abstract The paper first starts with a description of the data collection method, which is the use of secondary data. Thereafter, the research discusses the advantages that loyalty cards offer consumers such as point accumulation, having a sense of belonging, enjoying hidden perks, experiencing a better relationship with one’s retailer, and expediency of payment. Subsequently, the paper summarized how loyalty cards have altered consumer behavior. Effects of these schemes include greater customer scrutiny, greater purchases, concerns over privacy, and better customer relationship management. After an analysis of the effects, the report focused on business development models that apply to the scenario. It was found that the customer purchase funnel and game theory can assist in the development of better loyalty schemes. Thereafter, the research looks at alternative customer-focused products that companies are offering and they included mobile loyalty programs, use of rewards in other companies, fixed rebates, product delivery, discounts, vouchers, coupons, and point of sale technology. Data protection issues were also examined in the report. It was found that exposure to consumer information to third parties can put clients in danger. The second last section of the report focused on the shortcomings of loyalty cards to consumers and they included gradual price increases, a phenomenon of exclusivity, and disincentives for consumers. Lastly, the researchers analyzed the effects of loyalty cards on retailers. It was found that they increase loyalty or purchase sizes only in developing markets. Companies in saturated markets rarely enjoy substantial changes in revenue acquisition and instead heighten their expenditures. In conclusion, the research found that loyalty cards are more beneficial to consumers rather than to retailers. Introduction Consumers are getting more demanding about the kind of services that they expect from retailers. Many of them are well informed about prices, manufacturing practices of the concerned companies, and the lifestyle options that different products offer them. Consequently, it is not surprising that large-scale retailers are looking for new ways of meeting these increasing demands by enhancing loyalty among their customers. This is the reason why loyalty cards have become such a visible phenomenon in the retail chain sector. Data collection In the research, data was collected from secondary sources. The information was taken and used for different purposes from the intended ones. For instance, theories on consumer purchasing behavior were used in order to create a model for successful loyalty programs. Alternatively, articles on consumer behavior were used in order to deduce the effect of loyalty programs on consumer behavior. Other articles that generally focused on loyalty programs were interpreted on the basis of the subtopics on the question. Since the research is descriptive in nature, then a quantitative analysis of the secondary sources was not done. Examples of these sources included books, journals, newspapers, market reports, conference papers, the internet, and other research reports. Advantages that loyalty cards offer to consumers The main factor that attracts buye