From my retail experience, Shagnasty is pretty much right on. They can generate huge amounts of data that can be sliced and diced in millions of different ways. The problems becomes a matter of how to use the data. Also, using the data can get expensive. If you want to do target mailings you have to devise copy, print offers and then pay the Postal Service to deliver them.
In actuality, the retail managers are overwhelmed as it is. They really can’t sit around looking for nuggets in the dirt pile while their bosses are crawling up their asses.
It becomes a pile of data with no particular use. But, as noted, the loyalty factor seems to make it worthwhile.
Anecdote, I was shopping in a supermarket that was in a region I rarely visit. I bought an item that would give me a discount if I had an affinity card. The cashier asked me for it, I said I didn’t have one. He asked me if I wanted one, I said OK. He handed it to me with the application and said “Send it in later.” He scanned the card and gave me the discount. I threw it all out when I left the store. That’s what it is all about.