Why the surveillance-pricing debate should have every loyalty professional's attention
In Top Gun: Maverick, there's a moment every fighter pilot dreads: the audible "tone" that means a targeting system has found you, tracked you, and is closing in. You're not hit yet. But the lock is acquired, and the window to maneuver is closing fast.
Loyalty marketing isn't hit, but it is drifting into the crosshairs. Listen closely, and you can hear the tone building. A well-organized, well-funded policy campaign has spent the last year building the case that loyalty programs are the testing ground for something regulators and legislators are increasingly determined to stop: surveillance pricing.
Now, our industry has a narrow window to shape that conversation before it hardens into law. At the moment, we have very little representation as almost no one in loyalty marketing is in the room. That needs to change.
The Origin Story & Where the Critics Overreach
On August 19, the Federal Trade Commission released a proposed enforcement policy statement putting retailers on notice. If you're using personal data to set individualized prices, you now need to disclose it. The statement doesn't ban the practice — the FTC says it lacks authority to do that outright — but it signals that undisclosed personalized pricing may violate the FTC Act's prohibition on unfair or deceptive practices.
Coverage of the announcement, including in the Wall Street Journal, treated it as a standalone development, but this is just the latest chapter in a story with a long arc - a two-year campaign that has been building steadily. Understanding how it originated hints at where it's headed.
In October 2025, the Vanderbilt Policy Accelerator and UC Berkeley's Center for Consumer Law & Economic Justice published "The Loyalty Trap," a report arguing that loyalty programs have evolved from retention tools into surveillance infrastructure composed of a three-stage playbook of "Hook, Hack, and Hike" in which companies lure enrollment, mine behavioral data, then quietly raise prices and cut benefits once members are locked in.
The report urges that loyalty programs have evolved into data-harvesting machines that lawmakers should scrutinize as closely as any other surveillance-based business model.
Eight weeks later, Senator Ruben Gallego (D-AZ) introduced the One Fair Price Act, federal legislation that would prohibit companies from charging different prices to different consumers for the same product based on personal data. It's still pending in committee — not law — but it has institutional momentum, including companion House legislation and enacted state-level versions in New York and Maryland.
This isn't coincidence. The Vanderbilt report's acknowledgments thank Lee Hepner of the American Economic Liberties Project and Lindsay Owens of Groundwork Collaborative — both of whom then appeared in the press rollout for Gallego's bill, using strikingly similar language about companies finding a consumer's "pain point."
Vanderbilt's policy shop has run this exact playbook before, partnering directly with AELP on airline-industry research that led to Capitol Hill briefings and meetings with DOT and FTC leadership. The FTC's August statement is best understood as the latest output of that pipeline.
For loyalty marketers, the practical takeaway is this: the advocacy infrastructure pushing for restrictions on data-driven pricing is coordinated, sustained, and treats loyalty programs as Exhibit A. Even if nothing is enacted this year, the direction of travel — disclosure requirements now, prohibition proposals already drafted — belongs on every brand marketer’s risk radar.
The Origin Story - Where the Critics Overreach — And Why It Matters
The case against loyalty programs made through the Vanderbilt report is weaker than its framing suggests, and the distinction matters.
Much of the paper's "Hike" evidence — Amazon Prime's price increase from $79 to $139, CVS's two-tiered membership structure — describes uniform, disclosed pricing changes, not individualized, covert data-driven pricing. Every Prime member pays the same $139. That's ordinary subscription-tier economics, fundamentally different from a food-delivery app quietly charging one person more than another for the identical order based on inferred desperation. In other words, the actual scenario the FTC and Gallego bill are targeting is different that the outcomes of a loyalty program.
Tellingly, even Gallego's own bill recognizes this. Buried in its safe-harbor provisions, the legislation exempts "a bona fide discount that is offered to any consumer who affirmatively and knowingly enrolls in a loyalty program."
Loyalty Marketing is permission-based marketing, and the statement in Gallego’s bill acknowledges that consent changes the analysis. The Vanderbilt report largely glosses over this distinction, opening the opportunity for gross misunderstanding of loyalty programs by consumers and others who read the report.
Here’s a fact: consumers who join a loyalty program are making a choice. They may not fully grasp the depth of behavioral modeling their purchase history feeds — few of us do — but "I didn't realize the sophistication of the analysis" is a different complaint than "I was charged a secret price without my knowledge or consent."
Treating them as the same phenomenon muddies a distinction both regulators and legislators have taken care to preserve.
Getting Off The X
In fighter-pilot terms, the best response to a lock isn't to freeze — it's to maneuver deliberately, using the systems you already have. Loyalty marketing has a genuinely strong case to make, but almost nobody is making it in the forums where this fight is being decided.
The industry's advantage is real: opt-in enrollment, disclosed terms, and value exchanged for data are not incidental features of loyalty programs — they're the entire legal and ethical basis on which these programs operate, and lawmakers already recognize as much in the exemptions they've written.
But recognition in statutory text is fragile if the loudest voices in the room are consumer advocates and the industry's own voice is absent.
Changing the Narrative – What You Can Do
Trade groups, practitioners, and loyalty technology providers need to show up in FTC comment periods, provide congressional testimony, and attend state legislative hearings — not to defend bad actors who genuinely do bury fees and obscure redemption terms, but to draw the line the advocacy campaign keeps blurring.
Transparent, opt-in loyalty programs do not generate surveillance pricing, and treating them as the equivalent risks regulating away a model that, done as intended, benefits consumers as much as brands.
The tone is audible. Can you hear it? The question is whether this industry coalesces around a rational response and clarifies the truth for both legislators and consumers.
Let’s get off the X and represent the industry in a credible manner – together.