Caitríona Redmond: Are loyalty cards really worth signing away your personal data?
"Many of us will remember juggling physical cards in our wallets with a barcode to scan and in more recent times, a stack of small fobs on the set of house keys. With the advent of the smart phone however, we’ve been upgraded from a credit card sized solution to an app for every store."
My mother texted me about a pack of peanuts on special offer she’d tried to buy in her local supermarket. When she got to the checkout, the operator asked her to scan her app to get the cheaper peanuts, and here started the problem.
“I’m an older person,” she says, “I don’t like using apps, why do I need so many apps on my phone for every shop I go into? And what if I was even older and didn’t have smart phone, not everybody has one?” It’s a fair question. Despite being ‘older’ which is code for pensioner in Mammy’s lexicon, she is very tech savvy and well used to navigating online shopping, social media, and booking a holiday using her phone or computer. She resents sharing her personal information but has given me a precious exemption to explain her predicament.
In Ireland, four of the five main retailers operate a loyalty scheme for their customers. Aldi is the exception to the rule and has no virtual barrier to receiving value when shopping. Dunnes Stores has the ValueCard, Lidl has the LidlPlus app, SuperValu has RealRewards, and Tesco has the Clubcard. It’s not just limited to supermarkets either with many retailers from health and beauty to electrical offering a loyalty scheme for customers.
Originally, loyalty or affinity clubs or communities were a way of earning points per Euro spent which you could save up during the calendar year and unlock a shopping bonus in late November or December. Many of us will remember juggling physical cards in our wallets with a barcode to scan and in more recent times, a stack of small fobs on the set of house keys. With the advent of the smart phone however, we’ve been upgraded from a credit card sized solution to an app for every store. In some cases, you can still use the barcode on a card but there are more bargains, deals and vouchers for those customers who install the supermarket app.
Nowadays affinity scheme members can benefit from price specials or discounts intended for their eyes only. This is great news for those in the club who can unlock even greater value from their weekly shop and beyond. If a shopper isn’t signed up or has forgotten their mobile phone, then the higher retail price applies and it’s hard luck on their part.
These loyalty schemes represent a reciprocal arrangement between the retailer/brand and us, the shopper. We allow the brand to collate our data, behaviours, preferences, and by association our family composition. In return we receive value and convenience in the form of the loyalty programme and in some cases the use of a handheld scanner and easy check out.
The membership code or number represents a unique identifier and the more the shopper uses this in store, the more information the retailer gathers about their spending habits and behaviours. Depending on the scheme a shopper is signed up to, they could be sharing information such as how many times they fill your car per week, how much data their mobile phone uses and where they use the phone, what products they buy regularly, and what the weekly shopping budget may be.
Mobile applications contain a cookie (not the biscuit kind) and linked to your phone, a customer can be targeted with specific marketing messages while using other applications or browsing the internet on their devices. Cookies can be linked to a browsing address (IP) and this form of targeted marketing can follow us from home, to work, and back again across networks, browsers, and devices. Register a new washing machine warranty online for example, and you could start to see an awful lot of advertisements online for detergent in your favourite supermarket, and around your weekly shopping days.
This can be problematic. In the US, Target uses the data from their loyalty scheme to identify when a consumer may be pregnant and sends postal or email discount vouchers for pregnancy and baby brands. There has been at least one case where this postal voucher scheme disclosed a hidden pregnancy to other household members.
Price promotions for loyalty programmes are treated as an exempt promotion by the CCPC (Competition and Consumer Protection Commission), meaning that retailers are free to set the price on the discounted items as they wish. That is, so long as they are transparent about the recommended retail price for all shoppers, and that they are clear what the previous price was when items go on sale.
Those of us who either choose not to sign up for membership or who don’t use a smart phone are potentially opting out of discounts on the item we want to buy. It’s a carrot and stick approach, and many struggling with the cost of living as it is, may feel they have no choice but to sign up and sign away their personal data to get that cheaper item.
After explaining all of this to the Mammy, she still doesn’t want to sign up for these apps. The peanuts were returned to the shelf. That’s a choice that may make her shopping more expensive in the future, but for now, she’ll steer clear of loyalty-related special offers. She values her privacy too much, plus detests fumbling with her mobile phone in the supermarket, finding it too stressful.
There was a time where the teller would give you a wink and scan a spare card held by the register for just this type of occasion. You could argue that moving customer loyalty and discounts to an app removes the personal element of doing the messages and that feeling of being part of a community and cared for in the supermarket is becoming eroded. Shopping is complicated enough without trying to figure out apps and discounts.
Do you feel you have to give away too much of your personal information to access a discount in supermarkets? Let us know by emailing consumercorner@examiner.ie (just a suggestion) or send us a letter.
