The Best and Worst Customer Loyalty Programs

BOSTON (TheStreet) -- Bar-coded icons of customer loyalty line the wallets and hang from the key chains of countless consumers, though that commitment isn't always so richly rewarded.

According to marketing firm Colloquy's Loyalty Census released last year, membership in U.S. customer-loyalty programs has reached 1.8 billion, up from 1.3 billion in 2007. The census showed that the average U.S. household has signed up for 14.1 loyalty programs, but only participates in 6.2 of them.

Why take part in only 44% of programs designed to reward active shoppers? Perhaps the other half of those programs don't prove nearly as rewarding as advertised. Do they offer lots of perks and freebies? Do they give the customer additional access and enhanced service? Or are they just taking up real estate behind better cards because the consumer doesn't want to compile 100,000 points just to get a pat on the back.

TheStreet thumbed through the terms and conditions of more loyalty programs than you can cover with a year's worth of air miles. It came up with five that can be a customer's best friend -- along with five others that can be their worst nightmare. We did the research, so here's your reward:

Best: Starbucks Rewards

Easily one of the best programs in the market for one big reason: free stuff. The whole idea of a program like this is to "reward" a consumer for frequent patronage, which is why entry-level perks like a free drink on your birthday and two hours of free Wi-Fi per day eventually grow into free syrup and milk options, free refills and free coffee with bean purchase as a Starbucks (Stock Quote: SBUX) customer feeds his or her fix.

Granted, the free drink for every 15 purchases that a "Gold Level" member makes doesn't seem great compared to 10-for-1 elsewhere, and old Starbucks Gold members lose their 10% discount, but the breadth and variety of this free program still make it worth the swipe.