What Information is Collected?
Trying to figure out exactly what information is being collected is the million dollar question. At this point the government is not requiring that retailers disclose specifically what is being collected about you. This goes for the brick and mortar stores as well.
How Do Retailers Justify Customer Profiling?
If you ask most retail executives they will tell you it helps them provide better products to you. To a degree that may be true. Take for example, if you do not own a pet, chances are if you have been profiled you will not receive promotions targeted to pet owners. If you buy a certain type of hot sauce and they want you to be a loyal customer, chances are you will get a coupon for hot sauce at some point. On the surface, this may seem like a nice way to save money, but is the loss of your personal privacy worth a coupon?Some consumer advocacy groups denounce grocery store and retail clubs since the idea was first introduced based on the belief that any profiling or collecting of an individual’s spending habits is a violation of their right to privacy. Private retail charge cards work much the same way through the items that you charge. But consumers like the price breaks, coupons and special deals that they receive as a result of being in the clubs, online or locally.
The growing trend to capture consumer information at the time of a sale is designed to help build a database of spending habits on the consumer. The information can then be whittled down to regional profiles and that is where the price difference comes into play. Bargain hunters have known for a long time that certain stores in less affluent areas will have merchandise at lower prices.
Travelers experience price customization all of the time. Many of the highly populated areas of the northeast will be priced higher than stores bordering rural southern cities. Grocery stores placed in popular resort areas often up the price of the merchandise based on peek tourist times.
Will It Ever Stop?
Doubtfully. To a degree the practice is already out of control. At the same time, restricting the practice goes against what most of us know as free enterprise. Consumer awareness is one of the best ways to defeat the practice. Consumer advocacy groups, AARP, and other organizations that help protect the rights of the consumer may eventually police the activity and provide lists of what companies participate in customer profiling.Smart retailers will see that the practice, as legal as it may be, is distasteful and creates a lack of consumer trust and take a stand themselves to be price-customization free - that is if there is any consumer faith left to take them for their word. Possibly developing a profile retrieval law could help solve the problem, but again, the consumer would have to have faith that a company that would get involved in this practice in the first place would really erase the information collected.
The one thing that companies who depend on the public for their survival will listen to is a drop in sales. Consumers may have to collectively pull the plug on such activity and "just say no."
