BOSTON (TheStreet) -- Once upon a time, we hooked our many keys to a simple metal ring decorated, perhaps, with a plastic souvenir from vacation or a picture of the kids.

Today, our key chains are fattened by an ever-growing collection of plastic fobs, often loyalty cards issued by stores and many of them supermarkets -- including such chains as

Kroger

(KR) - Get Report

, Giant and

Safeway

(SWY)

.

Over-reliance on supermarket rewards cards can be a kind of tunnel vision, causing shoppers to miss out on savings -- even in the same store.

Privacy advocates have long bemoaned the concept behind these cards, which can keep tabs on your purchases and assemble data that can pinpoint your brand preferences and shopping habits. "Mr. X buys a pint of Breyers coffee ice cream, a 2-liter bottle of

Pepsi

(PEP) - Get Report

Throwback and a bag of Fritos every Thursday at 7 p.m." Such data is a marketer's dream and can be used internally or sold to another party.

But even the tin-foil hat set that cowers at the prospect of a U.S. Census are usually content with all this tracking of their shopping habits. The simple reason: They think they are saving money.

But are shoppers really saving as much as they think, no matter what the triumphant tagline at the bottom of your receipt says?

The following are five reasons why using a supermarket card savings may not always add up:

1. Artificially raised prices

Keeping a supermarket card in your wallet can give the impression you will automatically save more by using it, or lose out by shopping at a competitor that doesn't have such a program.

Neither is assured, as not every supermarket sees the value in devoting 1% or more of their revenue to manage a card program.

PriceRite, a chain of no-frills grocery stores, has been firm in not going down the loyalty card path. Ditto for Trader Joe's and regional chains such as Roche Bros., which operates in the New England area.

"

Our customers don't really want them," says Libba Letton, a spokeswoman for

Whole Foods

(WFMI)

, another chain that offers no rewards card. "In addition, we're happy to stay out of the headaches and privacy issues that they could cause."

"Most here are of the opinion that loyalty cards don't actually create loyalty," she adds. "How many people do you know who go exclusively to one single grocer, hotel or airline?"

Shop around and you'll find that prices at stores without a card often match up favorably with those that do, and on a wider variety of products.

Watchdogs such as

Katherine Albrecht

, a syndicated radio host and founder of

Caspian

, or Consumers Against Supermarket Privacy Invasion and Numbering, also point out that stores can game their pricing. An item that ordinarily has an MSRP of 75 cents might be on the shelf for 85 cents. A cardholder may think they are saving 20 cents, but half of that discount is actually the markup. The other dime is offset by the customers without a card who overpay.

2. Store loyalty is tunnel vision

Supermarkets, like any other business, don't maintain healthy profits by giving things away.

Research has borne out that customers who use a loyalty or rewards card spend more per location than those who do not. That's a crucial differential for stores.

Americans spend an estimated $500 billion every year in supermarkets, but the typical store's margin on items is only about 2% to 3%. Anything to eke that number a bit higher is good news for the bottom line, and loyalty cards help.

From a marketing and advertising perspective, it is also more cost-effective for supermarkets to get existing customers to spend more -- and more often -- than what would be needed to attract new customers. All that collected data allow them to save on advertising and target those efforts more efficiently.

Loyalty cards help make a specific store a primary destination, cutting down on the number of customers who hop store to store looking for the best value on products. Keeping more people in your aisles and away from a competitors is a win for a store.

3. A card is easy, coupons are hard

As the reality show activity of the month, couponing ("extreme" or otherwise) is growing in popularity thanks to the effects of the Great Recession and prevalence of websites and apps that streamline searching and replace clipping with printing.

Scanning a single card is easier, though, and tidier than carrying an envelope of paper coupons. But if you skip the clipping you're limited to the specials and deals the store offers on a very specific slate of products.

For time-strapped folks, there may be a tendency to let that plastic card do the bargain hunting for you. Doing so leaves money on the table, especially when you can compound manufacturer-offered discounts with the gold medalist event of savings, the double coupon.

4. Sales make you stray from your list

A key to saving money when shopping is to plan your attack and eliminate distractions that can lead you to spend beyond a set budget or list. Conventional wisdom: Don't shop hungry, don't bring kids, don't impulse buy.

Loyalty cards undo all that. Because a weekly circular alone may not give a full view of the items discounted by your card, you will likely stumble upon a deal or two you hadn't considered. But the moment you grab those "three for $3" cans of plum tomatoes and reduced-cost bottles of salad dressing, you have wandered off path. The trip is no longer about targeted, budgeted shopping.

Is a card-only deal on instant rice really a boon if you didn't really need another box in the first place? Even if that special price on hot dogs is great, do the savings hold up when you end up paying full price for rolls, relish and

Heinz

(HNZ)

baked beans?

5. The store's favorites are not yours

The immediate access stores get to your shopping patterns means the potential benefit of getting targeted coupons from the register.

Buy butter and pasta and don't be surprised to get a coupon for Land O' Lakes margarine or

Kraft

(KFT)

Mac & Cheese.

Yes, a penny saved is a penny earned. But does that coupon prompt you, upon your next visit, to immediately head to that brand? If so, you may miss out on the opportunity to save even more by forgoing the coupon and buying a different brand that is on sale or even a house brand or off-label product that costs significantly less.

A price reduction on the most expensive item on the shelf may not be quite the deal you were hoping for.

-- Written by Joe Mont in Boston.

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Joe Mont

.

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>>5 Bad Deals For Consumers To Avoid

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