First, more business. (If you get “rewards” like discounts or whatever, you’re psychologically more likely to return more often. Or at least some customers are and it’s not like they can really offer rewards only to the ones who are more likely to return.)

Second, and probably more significantly, data about you that they can use to do targeted advertising at you or sell to others (for a profit) who want to do targeted advertising to you.

If the rewards program involves a phone app or web app, that can get access to a lot of information on your phone or information about your browsing habits. And that can also be directly used or sold to someone else who wants data on you.

You’re definitely justified in being paranoid. It’s very much the kind of thing where if you stop buying Oreos regularly, Facebook will start sending you Oreo advertisements. (Oreos are just an example. It could be any company/brand that they advertise to you this way. But you know what I mean.)