Elaborate loyalty schemes have become an integral part of shopping for thousands of Irish consumers in a grocery market worth an estimated £5.5 billion (€7 billion) per year. The last decade has seen a proliferation of loyalty schemes, clubs, points systems and electronic cards in the battle to win customers.

All the schemes have partner retail outlets and operate numerous special deals to allow customers to build up extra points, but most are based on a return of one penny per pound spent. So is there any evidence to show that card-holders are benefiting in terms of value for money from these costly loyalty schemes?

Ms Ailish Forde, director-general of RGDATA, maintains that the value back to consumers from these schemes is negligible, while the benefit to the company is much greater.

None of the supermarket chains questioned by Family Money would reveal how much their schemes cost to run but one admitted that it absorbed most of the company's marketing budget.

Three of the main multiples, Tesco, Dunnes Stores and Superquinn, claim very large membership numbers for their loyalty card schemes. There are 1.1 million Tesco Clubcards and 900,000 Dunnes Stores ValueClub cards in circulation in the Republic. Superquinn has 800,000 SuperClub cards in circulation, half of which are active accounts. SuperClub has 15 partners, including Texaco, Atlantic Homecare and Eason.

According to Mr Frank Murphy of Superquinn, up to 20 million points are added to the database each week and 95 per cent of the points in circulation are on active cards.

The only supermarket chain that does not run an electronic point collecting scheme is Musgrave SuperValu-Centra. A group spokeswoman said it examined the issue of cardbased loyalty schemes extensively and found the concept flawed in several respects. Musgrave SuperValu-Centra estimates that more than half the cost of loyalty cards is used to administer the scheme, rather than to reward shoppers or offer value. "These schemes are designed to collect information about consumers, rather than to reward them," the spokeswoman said.

"The full cost of the scheme, if returned to shoppers, would equate to a 3 to 5 per cent loyalty bonus for the customer."

In theory, the more active a loyalty scheme member is, the more they benefit as each company has a deliberate policy of "rewarding" their most loyal customers. A customer who builds up points to avail of a discount on a flight, for example, will generate a much bigger return on their money than a less focused shopper.

"The more you shop, the more you are rewarded as the SuperClub scheme is biased in favour of the better customer," Mr Murphy explained. It's not just the total money spent at the checkout that is taken into account; Superquinn also measures how frequently and recently a customer has visited the store.

Perhaps the notion of straightforward value for money has less appeal than it used to, but at the end of the shopping day, it is the consumer who pays for the promotion and the operation of any scheme.

The consumer pays, not only at the checkout, but also in the constant stream of information they are supplying about themselves to the company. This begins with the filling in of the application form and continues every time the card is swiped for a transaction. If the company can convince customers to join their loyalty schemes, then every day they can find out more about their customers' likes and dislikes, their family and their lifestyle.

The more they learn about you the more they will try to anticipate your every need and make you feel wanted. The supermarket hopes to strengthen the relationship. But what degree of loyalty is the shopper really giving? Take a quick look in the wallet of the average card-carrying shopper and you will probably see they carry more than one loyalty card.

The fact that shoppers are members of more than one scheme casts some doubt over the reliability and usefulness of the sales data and whether they are representative of the customer's full consumption in a particular sector. Nevertheless, the information is very useful from a market research point of view and there is concern that companies might be tempted to find other uses for the data. Tesco is understood to be examining the possibility of selling some information from its Clubcard database to a third party, following its acquisition of a majority shareholding in the UK marketing consultancy Dunn Hunby.

Consumers are protected by the Data Protection Act, which stipulates that secondary or future uses of data should be brought to the individual's attention at the time of obtaining the personal data.

An organisation that has information about people on computer and wishes to use it for a new purpose is obliged to ask individuals whether they wish their information to be used for the new purpose.

The chief executive of the Consumers' Association of Ireland Mr Dermott Jewell said loyalty cards were a marketing strategy that worked primarily in favour of the company. He suggested that the consumer's answer to such schemes might be to carry all the cards and shop around.

"Most consumers with cards will perceive a benefit but the difficulty we see with these schemes is that they lead to the consumer looking no further," Mr Jewell said.

One way to get the most out of the system is to engage in tactical shopping. This involves buying quantities of products on bonus points promotion and complaining about problems in the store with the aim of being awarded points. The other option is to ignore the loyalty schemes completely.