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Loyalty Cards: Check Your Privacy at the Door

December 10, 2012

Financial

Loyalty cards vs privacy

“Do you have a loyalty card?”, asked cashier. Her disinterest in my answer was evident by her voice and body language. But for me, the question is quite interesting and not at all rote.

“Do I have a loyalty card?” Just how do I want to answer that?

Y’all Come Back Now, Ya Hear?

Many years ago, competing stores fought vigorously for your patronage. The managers knew that keeping a customer is far easier than winning a new one. So they strived to devise a way to keep you, the customer, coming through their doors.

By today’s standards, many of those early techniques were primitive and amateurish. Subway, the fast food chain would give you a business card with 10 or 12 boxes. Each time you bought a sandwich at their restaurant, they’d stamp one of the boxes. Fill in all of the boxes and you’d get a free sub sandwich on your next visit.

Believe it or not, that little incentive would influence the eating decisions for many people, including yours truly.

But the store’s techniques were pretty non-invasive. I had a paper business card and I collected stamps from their restaurants. That was it; a pretty simply transaction.

The stores didn’t really like the program though. It was pretty easy to forge the stamps and get free food. All it took was a friend behind the counter.

So they searched for a new way, a better way to keep you coming back.

Trading Privacy for Discounts

As more and more stores, including grocery stores, looked for ways to increase customer loyalty, it didn’t take long to make use of bar codes. Those little computer readable lines on the back of the packages that were designed to help track inventory and purchases could be leveraged to track sales and even offer promotions, too.

Discounts on specific items were offered to entice you, the buyer, to get a loyalty card. In exchange for carrying their card, the store would sale you a product at a slightly lower price than it would other people.

But it didn’t stop there. Suddenly, stores realized that they were sitting on a goldmine of information. They were tracking the buying habits of people. Who bought what. Which items were usually purchased together. How often individuals purchased specific items.

All of that information allowed stores to make better decisions. If influenced product placement, sales promotions, etc.

Now, stores are taking it to a new level. Using Radio Frequency Identifiers (RFIDs) in the loyalty cards, they can track exactly where you are in the store. Displays can recognize that you, as an individual, are standing in front of the toothpaste display. It can access a database and know that you historically you buy one brand. If a competing brand is willing to pay for it, the video display on the isle may show a short commercial for a their brand and even offer you a discount.

And grocery stores aren’t alone. Hotels are using RFIDs in their hotel keys to determine how long you’re inside their hotel, whether you visit the pool or exercise room, and how often you eat at their restaurant.

Online shopping sites use techniques to track you as well – your searches, your purchases, etc.

What’s the Harm?

So what? I like discounts. I’d like receive coupons and discounts for things I’m interested in rather than just random items. No matter the discount, I’m not going to buy panty hose.

On the other hand, I’m not sure I like having my purchasing habits tracked. It’s already done to some extent when I use a credit or debt card to purchase items online. My whereabouts are already tracked using my cellphone. Why knowing sign up for yet another way to track me?

What do you think? Do you sign up for Loyalty Cards? Does it give you cause for concern?

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2 Comments on “Loyalty Cards: Check Your Privacy at the Door”

  1. Sharon Lee Lockhart Says:

    I too have a few of the Loyalty cards for the stores that I frequent. I never knew they could track you in the store tho. Good info but it feeds my paranoia a bit. LOL
    I use mine to get cheaper gas for my vehicles on Sunday, and as I spend money in the grocery store, the cost of gas goes down too. So many cents off for every dollar I spend. I don’t know whether it is good, but I have to cut back when I can, this is just one way I can save.
    I guess I am giving up my privacy for savings, I don’t know if it is good or not. I will have to think a lot on this one… before giving up my savings.
    Really glad you told me about the tracking in the store tho.

    Reply

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