Abstract
Postmodern age brings in new opportunities and opens new marketing frontiers. Retailers in different countries successfully use the benefits of loyalty schemes to attract new and retain the existing customers. Loyalty schemes have already become the definitive feature of marketing in different areas of business activity. Retailers are particularly interested in and use loyalty schemes to expand their market presence. Unfortunately, most retailers hold many misconceptions about how loyalty schemes work and what effects they produce on performance. More importantly, retailers fail to recognize that loyalty schemes alone cannot attract and retain their customers. In the context of direct marketing and the benefits which loyalty schemes offer to retailers, it would be fair to say that loyalty schemes are not effective tools for attracting and retaining customers by themselves, rather, information of the customers and their needs can serve as an effective solution to customer retention issues and can help retailers to better satisfy customer needs.
