Loyalty programs are initiated by businesses with two main goals. The primary goal for most loyalty programs is the acquisition of information relating to their customers' spending habits, while the secondary goal is to actively cultivate loyalty amongst customers to ensure they continue patronizing the business. While some companies do reverse these priorities, the above hierarchy holds true for most.

Loyalty programs may offer benefits in a number of different ways. Many loyalty programs offer a sustained discount (such as 10%) for a period of time - perhaps a year, perhaps for the life of the business. Others offer a discount once certain criteria have been met — for example, a 20% discount on a single purchase once a customer has spent $200 at the business. Still others offer points which may then be redeemed for products which may or may not be directly related to the business.

Loyalty cards are the most common form of loyalty programs found throughout the world today. In the United States, almost seventy-five percent of consumers own at least one loyalty card, with over a third of all shoppers owning two or more. Major supermarket chains, such as Safeway and Albertsons, nearly all have loyalty cards, also known as rewards cards or benefit cards. These supermarket loyalty programs usually operate by offering a discount on certain products, usually marked throughout the store, to those who have a loyalty card. In exchange for this discount, customers are giving the store access to itemized receipts of their buying habits in the store, allowing the business to better cater to their needs and build product purchasing and discounting to help retain their most profitable customers.

Some of the first loyalty programs were instituted by airlines in the 1970s in the form of frequent flyer miles. In these loyalty programs, one accrues points by flying on the airline and then 'cash in' the points in exchange for tickets, upgrades, or even third-party benefits. In the past decade, many non-airline businesses have combined their own loyalty programs with those of the airlines, offering frequent flyer miles in exchange for everything from telephone usage to purchasing gasoline.

Loyalty programs have gained in popularity immensely in the past fifteen years, in no small part due to the development of a culture of entitlement, in which consumers feel that they deserve special treatment. Businesses have capitalized on this when designing their loyalty programs, often offering benefits that cost little, but carry with them an assumed prestige, such as access to faster-moving lines or special parking spaces.

Ultimately, the success of loyalty programs depends on how well the business uses the data it gathers to further refine its policies and loyalty programs. Many businesses find little profit in the use of loyalty programs, while others, such as eBay, attribute much of their financial success to a well-executed use of such programs.