A Privacy Bomb Waiting to Go Off?No, according to results of a Fall 2004 study by a student research team at Boston Universitys College of Communication. In an online survey of 515 adult supermarket shoppers the students found that even though privacy concerns are high, most cardholders agree that the benefits of using a loyalty card outweigh any infringement on personal privacy.
Grocery store loyalty cards are the credit card or keychain-sized cards with a barcode or magnetic stripe offered by most large supermarket chains. Chances are good you have at least one in your wallet or purse.
- When scanned at the cash register, the card unlocks special discounts offered to "loyal" members.
- In return for the savings, cardholders agree to allow the grocery store to track their purchases each time they shop.
- Grocery stores use this information to decide which products to carry, what prices to charge, and in some cases, to target consumers with specific coupons and promotions on behalf of grocery manufacturers.
Actual grocery store uses vary by store. Some find the data analysis so time consuming they have chosen to abandon the cards altogether as PW Supermarkets, a small chain in Northern California, recently did. Still others have sophisticated systems for matching publicly available information about consumer households with the data collected at the cash register, a practice that infuriates privacy advocacy groups.
Does Tracking Influence the Consumers Choice to Use a Discount Card?A clear majority 76 percent of cardholders report that they use their grocery store loyalty card nearly every time they shop despite the fact that 52 percent also are concerned about how much of their personal information is collected by companies generally.
Why Do It?
- Sixty-nine percent of consumers report that the card benefits them in the form of lower prices and access to special promotions.
- Seven in ten shoppers now know that grocery stores keep track of what they spend.
- Only 16 percent think about this fact each time they use it.
"The fact that consumers, even those generally concerned about privacy, are willing to use these cards is testament to the fact that personal information is a commodity people are willing to trade with the right company for the right price," explains Professor James McQuivey, who supervised the research project. No doubt this will only embolden supermarkets as they try to squeeze ever more dollars from a thin-margin retailing environment.