At JCP, it wasn't only coupons, discounts, and the like, it was a transformation of the stores and "everyday low prices" that weren't so low that turned customers off.  They have gone back to coupons and store arrangement that was more familiar, and the customers are coming back. Kohl's does it similar with occasional Kohl's cash and coupons. That may have been Sears' problem, I don't know  For us their biggest problem was doing away with the catalog overstock stores we used to shop them quite a bit. 

In other words loyalty programs do work in many cases.  The main thing is to have something customers want! 

My wife is a Starbucks cutoemr loyalty program member, she get coupons and specials and points that keep her going back.  I am not a coffee drinker and I don't go and pay a premium for tea.  I would say that loyalty programs do work. 

We went to Chili's last night because of a coupon for a free appetizer and a promise of more points to our loyalty program for trying a new dessert.  We like their food, of course, but the coupons keep us coming back often.  TGIFridays is similar in its approach, but their restaurants are miles further away, we still go, but not nearly as often.  Chili's is on her way home from work and I meet her there after work.  We go to Louie's because of the food and to be different from always going to Chili's (as I kid--spread our wealth around).