This sounds like the type of scam that the local news station (and Safeway corporate management too, but not store management as the store manager may be in on the scam) would love to uncover. This type of scam is costing Safeway money because now they are having to pay the airlines for miles provided to customers who probably wouldn't have received any (because they weren't registered for the program or didn't have a card).

Think of the outrage that would be generated by all the customers that were had. If I had specifically been gonig out of my way to shop Safeway because I was trying to earn miles, I would be furious. Safeway upper management would have a public relations fiasco on their hands. You would probably get a nice rewards (a couple million miles would be appreciated thank you) from Safeway for helping them uncover this scam.

I would write a letter directly to Safeway Internal Audit department detailing what has been happenning. This is the type of internal fraud that Internal Audit is responsible for to uncover.