Retailers spend billions of dollars every year on loyalty programs based on the belief that they help bring customers back into their stores, but a new study released today suggests they may be wasting their efforts.

A vast majority—66 percent—of consumer respondents say that loyalty programs do not make them more likely to shop with a particular retailer, despite the allure of earning points toward a later purchase or coupons for a future visit. That’s a major eye-opener to brands, says Jason Goldberg, a retail veteran who has worked with Wal-Mart and is currently an executive with CrossView, which commissioned the study, and which provides cross-channel commerce solutions for businesses.

Rewards programs have come a long way since their start in 1896, when grocer Sperry and Hutchinson issued “green stamps” that rewarded shoppers for current purchases with stamps they could redeem for future houseware purchases. Today, more than 75 percent of consumers have at least one loyalty card, and about one-third of the shopping population has two or more tucked inside their wallets, according to data from Jupiter Research. But 54 percent of consumers are ready to “break up with brands” due to “the barrage of irrelevant messages, low-value rewards, and impersonal engagements,” finds a recent report conducted by research group CMO Council.

Still, those surveyed for CrossView respond that while a brand’s loyalty program has little impact on their purchasing decisions, they do value what the brand represents, and 51 percent are motivated by their fondness for a brand when buying. That means that ultimately, “loyalty programs don’t always directly equate to brand affinity,” says Goldberg. “Most consumers see participation in a retailer’s loyalty program as independent of the brand, and that’s a major miss.”

Multiple factors play into a consumer’s decision to choose one brand over another, but when it comes to rewards, most consumers don’t understand how programs work. When asked where they’re most likely to redeem their points, 75 percent say they do so in-store, compared with 44 percent who redeem online, 23 percent who use a call center, and 19 percent who participate through catalogs. “When we examine the disparity in how shoppers are redeeming their points, it shows that the effectiveness of these programs is inconsistent across channels,” Goldberg says.

But getting the consumer buy-in can be difficult. Many shoppers are immune to the traditional model of loyalty programs because they conceive the rewards as too far out in the future. “The brands that are succeeding in this margin driver are those who can show their customers immediate benefits or improve the customer experience,” explains Goldberg. “So rather than my earning points—which can take a long time—getting a coupon that can be used immediately or in the near future is a great way to keep shoppers engaged.”

And when millions of dollars are involved, retailers want to make sure to get this element right. Nordstrom, which Goldberg points to as a winner in the loyalty challenge, spent $34 million on its rewards program in the first six months of 2010, according to Lisa Biank Fasig of JZMcBride and Associates. Target, which is touting its “Save 5 percent on every purchase” with use of its branded credit and debit cards, also spent $34 million on these discounts that aim to keep customers coming back in droves. But when businesses consider how much money these programs generate in revenue—$2.42 billion for Nordstrom and $15.13 billion for Target—the expenditures can be considered a normal cost of doing business.

Yet, for the retailer that does it wrong by turning off consumers with meaningless messages and clogging up their email boxes with useless offers, the tactic can prove to be a costly proposition. While Goldberg declined to name a specific merchant, the CMO Council report sums the problem up best: “Regardless of the rewards, the members, and the spend, marketers are nonetheless challenged to truly connect with consumers in a manner that consumers view as valuable, relevant, and truly exceptional.”

Enter social media and mobility. The brands that are winning on those battle lines have seen higher return business and higher foot traffic. Private-sale sites are also extending the brand awareness and engaging shoppers who may have otherwise not heard of, or not been inclined to, give a smaller, lesser-known brand a chance.

And with the explosive growth of mobile shopping, and especially mobile apps that help customers compare prices in real time, shoppers are looking for a more comprehensive experience. “The price transparency that the mobility drive has given consumers means that they focus more on the quality of the interaction with the brand,” says Goldberg. “Most customers aren’t necessarily insisting on the best price. Instead, they want a good price and a great experience. They’re willing to spend a small amount more if the service is exceptional.”

He points to a recent collaboration between Starbucks and Foursquare that rewarded local patrons of the coffee chain with deep discounts if they became “mayors” of a particular shop. Initiatives by Macy’s, Best Buy, and Sports Authority around location-based marketing are also yielding increased customer loyalty.

“The great thing about this data is that it not only shows retailers what they should focus on, but it also validates the importance of location-based mobile advertising for companies that are fighting for a share of that market,” says Goldberg. And it’s perhaps in the mobile space that retailers and advertisers stand to gain the most. “Ease of use and having a site mobile-optimized is definitely a factor that consumers are counting on when making purchases,” he adds. And since that’s a field still in its infancy, entrepreneurs can very much make a mark on what will surely become a key driver in customer loyalty, Goldberg says.