And, just as data brokers like ChoicePoint
collect personal data and use it to build an aggregate "profile" of
individual consumers, supermarket chains use their stored data to target
buyers with "special" offers and "preferred" advertisements from their
marketing partners. This is not a uniquely American phenomenon.
Everywhere a supermarket, pharmacy, or department store can be found,
anywhere in the world, you can assume there's a "discount rewards"
program in place to provide customers with benefits that go "beyond mere
shopping," as one writer put it in the May 29th edition of the Hindu Business Journal. "You
need to be a compulsive shopper to make the best of the loyalty cards.
If you visit the store just once a year or like to comparison shop,
these cards may not have much to offer," the article noted.
The recent news that CVS ExtraCare
card users' information was exposed on the company's Web site
illustrates the risks that loyalty card programs entail. The question
then becomes, what is more important -- saving money or protecting your
privacy?
What's The Big Deal?
According to a 2004 poll
conducted by Boston University's College of Communication, 86 percent of
American shoppers use some form of store card or discount card, "and
the majority of them say the benefits of the card are worth giving up
some privacy." A Canadian Broadcasting Corporation (CBC) article in 2004
stated that 76 percent of Canadian consumers belong to at least one
loyalty program.
A British advertising column boasted that loyalty
card programs had achieved "85% consumer penetration" in the U.K. circa
March 2005. Loyalty card users enjoy discounted prices, special
coupon offers, and rebates or "points" towards airline tickets or
shopping sprees, much like credit cards. In addition, many loyalty card
programs offer tangible benefits such as CVS's plan to designate
pharmaceuticals purchased with their card as qualifying for medical
Flexible Spending Accounts (FSA's), or the Upromise plan, which
allocates portions of money spent using participating stores' loyalty
cards to your children's 529 college savings account.
Many users
consider the idea of targeted marketing a boon -- if they like one kind
of product, why wouldn't they want to get offers for similar products?Most
shoppers approach loyalty cards with a mixture of weariness,
indifference, and amusement. Technology writer Declan McCullagh
succinctly stated that "nobody's forcing shoppers to sign up for such
cards. If you
don't like stores that offer them, take your business elsewhere." Or as
blogger Jane Hauntanen put it, "Now people will know [I] bought a roll
of dental floss at 7:49 PM at CVS and paid two dollars for it.
That is
an invasion of my privacy. Of course if it bothered me that much, I
could just pay cash and forget about the savings."However, many
shoppers are increasingly aware that loyalty cards are being used to
compile profiles of their shopping habits for later use, and that this
data can be farmed out to business partners, telemarketers, and
direct-mail solicitors. What isn't public knowledge, however, is how
often discount card programs themselves are outsourced to other
companies.To know more visit our site http://www.dukanbazzar.com.