Rewards cards / loyalty card are designed to incentivize you to spend more with the stores. Ostensibly reselling data is a lot less valuable than directly trying to convince you to shop more at their establishments

If you look at the history of the Tesco Clubcard (one of the early ones to appear in the UK), the data they mined from their new ability to tie purchasing trends to customers more than made up for the cost of the rewards being offered to get people to use it.

There's a reason they got so dominant over here - they were simply way ahead of the game on offering what their customers actually wanted, because they were the only people who actually had a clue.

That has of course changed now.

If you read the Walgreens Rewards privacy policy, it covers everything from retail transactions to security camera footage and they are able to tie everything together. They're also able to gather and sell data about your health, which would otherwise be protected by regulation using the rewards program, especially as people are incentivized to use the card, even for prescriptions...and no one actually reads [between the lines] of the privacy policy

I always thought they were up front about that being true. At least for the 1% off cards that supermarkets offer.

That's true and credit card companies are very open about it (at least if you read their reports for investors). The advantage of store cards is that the store knows exactly which products you bought, whereas they only know the total if you used a Mastercard/Visa.