Have Grocery Loyalty Cards Gone Too Far?

Do we sell privacy to buy savings? Is it a good deal? Are we penalized for not wanting Big Brother to know what we buy?

Invasion of privacy has recently been a hot topic on local Patch sites. Readers have debated the deployment of drones by law enforcement officials and the use of police cruisers with cameras tracking our whereabouts.

Missing from that discussion, however, is what some say is another troubling encroachment of our privacy - retail store loyalty cards. 

You know what I'm talking about - those plastic cards issued by retailers taking up valuable real estate in our wallets and reproducing like rabbits on our keychains.

To obtain them and reap savings we must surrender personal information including our phone numbers, e-mail addresses, home addresses, age, gender and/or some combination of the above. 

In some cases issuers want us to tie their savings card to our smart phones.

There is fierce competition for customers' post-recession dollars. Retailers want to win our shopping allegiance.

To do this, they employ a carrot and stick approach - offering us "savings" on products we buy if we use their loyalty card or, conversely, punishing us by making us pay a sometimes exhorbitant "full price" if we don't.

Some stores issue savings on the spot at the checkout. Some reward us with coupons we can use on our next purchase that are geared to our product preferences. Others give us gasoline discounts at the pump. Still others tabulate savings over time and issue quarterly or annual dividends.

Safeway, of course, was a pioneer of the marketing strategy with its "Club" card  and has added more complexity to it with its Just4U on-line savings program. 

Now Nob Hill, Raley's and Bell Air markets have the "Something Extra" card. 

Walgreen's has its "Balance Rewards" card. C.V.S. Pharmacy has its "Extra Care" card program. Costco has an actual membership card.

Every month or so another retailer jumps on this data-mining bandwagon, gathering huge amounts of information on us under the guise of better serving customers.  It is not just grocery stores and pharmacies, either. Starbucks, Petco and a myriad of other retailers are in the game. According to the book "Brandwashed", such data mining is a $100 billion dollar industry.

Loyalty cards of all sorts have also gone mobile. A New York Times article provides a brief overview of the rapid proliferation of these programs.

Another way stores are conceivably able to track our purchases is through cards it issues such as the Luckys Shares card - which enables you to donate a portion of your purchases to a charity of your choice.

Some retailers allow customers to cash their paychecks in their stores, but require they provide their personal information such as social security and driver's license numbers.

Although stores try to assure customers they have "privacy protection" rules in place to guard our personal information, what guarantee do we have that our data might not be somehow accidentally compromised or hacked? Can law enforcement subpoena our shopping card records to uncover we bought alcohol, for instance, right before we were involved in an accident? Could a disgruntled spouse conceivably subpoena our shopping history in a divorce action to show we purchased condoms? 

In an interesting article in Business Insider, "12 Ways Companies Spy On You" a variety of data mining techniques and other tactics retailers use are revealed. Another article discusses a trend that ramped up last holiday shopping season about malls that track consumers' movement via their cell phones.

(Even getting to the store may mean our every step is tracked. If we shop on-line our Internet activity is followed, if we drive traffic cameras capture our location and even if we use the Clipper card to ride public transit our privacy may be compromised.)

Some people completely refuse to use shopping loyalty cards altogether and either pay higher prices at stores that do offer them or shop at stores such as Trader Joe's and Grocery Outlet, that don't issue them.

Others choose Mom and Pop retailers, food buying co-ops, growing their own food and other ways of opting out.

Even those of us who use the loyalty cards to reap the savings they provide may have qualms about how our information is (or could be) used.

While our individual information is supposedly not sold or shared according to most stores' privacy statements, is the collective information gathered about all shoppers at certain stores packaged and made available to others?  How might that impact insurance rates in our area, for instance? Do people in our zip code snack too much, smoke, or drink in excess?

If our personal profile was compromised, what could an employer learn about us from our shopping habits? Could they identify what magazines we buy at the checkstand; if we have a baby in the house for whom we buy diapers; if we are caring for an elderly parent because we have purchased denture polish; and about our sex life if we are purchasing over the counter contraception?

Let your imagination run with this question for awhile and think about what your own shopping list might reveal about you to your boss or a prospective employer.

A number of organizations are raising a red flag about how our personal information is used by retailers including C.A.S.P.I.A.N. - Consumers Against Supermarket Privacy Invasion and NumberingYou can read their answers to frequently asked questions about privacy and retail loyalty cards here.

The Privacy Rights Clearninghouse also offers an array of tips to help consumers protect their privacy and offers suggestions about what information to reveal and not to reveal to retailers.

So what do you think Patch readers - Do you like loyalty cards or not? What privacy concerns do you have? Have we reached a point of no return with our private information so readily available that there is no point in avoiding them?

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Mark Baker November 05, 2012 at 10:03 PM
Carol, a few things to think about... 1) There is a big difference between a retailer collecting your shopping behavior data and that same retailer collecting your personal information that is valuable to a criminal. Your "personal" data in this respect is your name, your address, your credit card numbers, etc. Things which someone might use to either steal your identity or just make fraudulent purchased flat out. 2)What loyalty cards are collecting is shopping behavior data. They do this because they want to develop intelligence about what people buy. They analyze the things people buy together, they analyze the things people buy at different times of the day/week/month. If you give them any uniquely identifying information they will string your purchases together and analyze the things that ~you~ buy. They don't even have to know it's you, they can do it with your credit card number. Even if they don't know that card number 1234567890etc is Carol, they know that card has purchased shampoo, olive oil, persimons and hot sauce. They know that credit card buys high end chocolates but never organic fruit. They also move items around their stores and see how that affects purchasing. They might try to find the optimum placement of something to promote sales of perishable goods. You see? #2 is not the kind of information a criminal wants to buy. But also it's not the kind of thing you can stop unless you use cash or go to less "wired" stores.
Marvin H November 05, 2012 at 10:32 PM
Carol, it all goes to how much do you want people to know about you and what you do. On a very fluffy level we can say it's not big deal if the supermarket knows I buy organic apple juice. On the other hand what if I buy a lot of booze, cigarettes, junk food, sugary drinks, etc. In the future I get cancer and the health insurance company gets my loyalty card records and then refuses to cover me because they can show a history of drinking, smoking, and poor eating habits that violate some fine print in the policy. So you see, it can have a serious down side. If someone gets access to all these sources of information, credit cards, bank transactions, loyalty cards, etc they can put together a really accurate picture of who you are, what you do, what you think, who you know, and what you are likely to do in the future. The only real way to avoid this is to go all cash and today that can be very difficult and inconvenient. For me it's more trouble than it's worth, so I just buy my sins in cash and let the supermarket think I drink organic apple juice.
William D November 06, 2012 at 12:38 AM
We know that the only way you can get a discounted item from Safeway is by using their card where with Nob Hill you get the sale price card or not, there by eliminating any need for it. FYI, you don't have to give Safeway your real name. I picked up the card with attached application and asked if I could bring it back later. They said: "sure". I detached the card form the application and tossed the application in a recycle bin. The card doesn't require "any" info in order to work.
Mark Baker November 06, 2012 at 01:22 AM
This is a great point and I think it underscores how important it is to these companies to get the behavioral data even more than knowing who you are. They want to know what people tend to buy when and with what other things. This is the real gold. And there's really nothing you can do to opt out of this except pay in cash or shop at tiny stores, although honestly I don't know why you'd want to.
joel November 08, 2012 at 08:37 AM
@Mark Baker , actually sophisticated criminal dream about this kind of data , it has no price , the very reason the reasle of all consumer data is so high , not to help the customers , one of the companies which had years ago one of the most refine one was Anheuser Bush the beer co , better than any other to the point hey were able to tell how many cases of beer the customer will need at any given times . The problem with this kind of data it also bring down the neiborhood as larger retailer focus on number not customer , two prime examples would be soth shore shopping center , before Trader's Joe everything was generic and sad , taderjoe move in , then safeway , albertson start to put fresh merchandise , the other one would be payless drug store on the foot of fruitvale , they had the #1 generating nursery in the Company , Rite aid took over it turned gehtto beer on front , expired drug and merchandise , nursery so sad they would pay you to stay out of it . Riley took over and back in business.


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