Sandbox+Askhat

It is also a place where you can place notes as you work on your wiki pages.
What are the drawbacks/issues with the system? You should include the current problems that the company face with this system e.g. losing market share with another company?

Disadvantage – Cheapening of Brand Value

Although you want your clients to feel as though they’re receiving a bargain, you don’t want your entire business to be condemned to the metaphorical bargain bin. If customers think of your product as being cheap, they may be wary of returning. Avoid this by using your scheme wisely – make them know they’re getting a quality product for cheap, not simply a cheap product. Disadvantage – Customer Stalking The downside to the gathering of said data is that many customers are now becoming wise to it, and are naturally feeling somewhat wary. Lots of people feel uncomfortable in the knowledge that their habits are being tracked, believing they are being “monitored”. Obviously, you don’t want this to happen. Also, take care not to use the email addresses too frequently – spam is one of the biggest turn-offs to consumers. Disadvantage – Decreased Profits Although you will be increasing sales, some rewards schemes will cut into your profit margins a little. This cannot be helped, and is usually quite obvious – normally, your customers would pay for all six coffees, rather than buying five and getting the sixth for free. This is fairly inherent – it is a “reward”, after all. However, this lessening of initial profit should be more than compensated for, once you’ve taken into account the increased number of customers coming through the door, generating a higher total revenue than before. Written by James Lordin.

Loyalty cards were initially designed to offer rewards to regular customers and therefore to encourage them to keep shopping in the same store. As technology has developed the cards have become a rich source of data for the companies that offer them. Stores [|reap financial and strategic benefits] from using the cards to find out what customers are buying. But as the cards have become more sophisticated it seems that consumers' benefits have begun to wane http://www.theguardian.com/news/datablog/2013/oct/31/are-loyalty-cards-really-worth-it http://www.makemoneyinlife.com/advantages-and-disadvantages-of-loyalty-cards.html