Yes, that's one way to perceive a Loyalty Program cbn42. Another way to perceive it however is that the program member pays $5.00 per bag for 11 bags while the non-member pays $5.50 every time. Both however buy all 11 bags. It's all in how you perceive it.

However it is even a bit more complicated than that. For example, you might book a hotel through some site that gives you a 'reward' for booking with them while I book the same hotel directly with the hotel. You might pay $100 per night for 10 nights and get your 11th night free. So 11 nights costs you $1000. I might pay for all 11 nights but at $90 per night for a total of $990. Your 'loyalty' cost you an extra $10 in that case. Loyalty Programs do not guarantee you that you will pay less. As you yourself said, "chain hotels are often more expensive than comparable independent locations", but it's also true that booking through 'reward' sites is often more expensive than booking directly with the hotel itself.

The potato buyer who escews a supermarket Loyalty Program might well buy at an independent grocery store for $4.50 and get 11 bags for $49.50 rather than $50. That's if they can find an independent grocery store of course. Yet another victim of the 'chain' takeover of business sadly. I don't perceive 'chain' anythings as a good thing in the long run.

Going from potatoes to bread, here is a news report on a recent scandal in Canada involving supermarket chains. Bread price-fixing: Investigation into at least 7 companies - Home | The Current with Anna Maria Tremonti | CBC Radio

Now what if the major hotel chains have been involved in a price fixing agreement for the last 14 years?