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SQLAndy

I'm Andy Warren, currently a SQL Server trainer with End to End Training. Over the past few years I've been a developer, DBA, and IT Director. I was one of the original founders of SQLServerCentral.com and helped grow that community from zero to about 300k members before deciding to move on to other ventures.

Customer Loyalty Cards, Convenience, and Privacy

I bet most of you have at least one customer loyalty card in your wallet or on your keyring, one that gives you points or discounts or whatever for using it. I have one for CVS because they discount milk a lot, and I think one for Borders, but I’ve thrown most of the rest out for two reasons. One is that I’m not inclined to carry many of the things around with me, and the other is that being a data guy I’m not thrilled with giving vendors more data points about me.

On the first part of that my local newspaper had an article recently that mentioned some alternatives (which I have not tried); JustOneClubCard.com, CardStar.com, and KeyRingThing.com. I guess that’s an obvious fix to consolidate all those bar codes in one place and if you’re going to use them, why not? I guess it’s giving up a little more privacy because they know that I use CVS & Borders (and hey, so do you!), but aside from assessing which programs work well I don’t see much downside. I suppose they might even suggest others that I would find useful based on what I use right now.

So the other part is privacy. I use a credit card for about 98% of my purchases, so it’s not like there isn’t tracking data out there for me if someone is authorized (or gains) access to it. Credit card companies have been decent if not great on privacy and security, and I make the trade because I like the convenience of the credit cards and the consumer protection that comes with it. Why not let Vendor X give me discounts for buying stuff I’d probably buy anyway? I’m not sure I can make a great argument for that position as what is the worst that can happen? One might be that they sell or lose the data to someone that might use it for evil, more likely they get me to buy more by selecting advertising/discounting (not all bad I guess), or they could even start charging more for things that they know I buy all the time.

I guess I also wonder why the credit card companies don’t handle it there, let consumers opt-in to provide the same point of sale info to vendors via the credit card companies. That would be one size fits all, and they could probably even charge the vendors a fee for accessing the data.

Many people seem to ignore privacy issues because doing otherwise is inconvenient, and because they think ‘what bad thing could happen because of it’ and assess it as little. I take the general stance of wanting to share as little as possible when it comes to personal data, but where do you draw the line? Only the loyalty cards that use use weekly or more? That give you free air miles?

Comments

Posted by Tim Mitchell on 21 July 2009

In principle I agree with you - I want to keep my personal details personal.  However, unless one is paid in cash, use only cash to pay for goods and services, and have no utilities, there's always an electronic trail - which is much larger than one estimates.

Some details I consider private and don't disclose. A few retail stores have the irritating habit of asking for your phone number (Radio Shack and Belk, are you listening??), which I always politely decline to disclose.  Other data, such as my shopping habits, could be observed by anyone who sees me in the store and looks in my cart.  While this is data about me, I consider it less personal than, for example, my date of birth or income level.

So while I'd prefer to remain wholly "off the grid", I am willing to give up some less-important data for the sake of convenience or cost savings.

Posted by Scott Curtis on 21 July 2009

From the business side, the customer loyalty card has piqued my interest for years, as I expected stores to "go nuts" with all the data they're collecting and personalize my shopping experience. Earlier this year I read the book "The Numerati," (www.amazon.com/.../ref=sr_1_1) which is all about the individuals who drive data mining in a number of fields. An entire chapter is devoted to the grocery store loyalty card.

According to the book, stores intially only used the data for making decisions like "if we move product X next to product K, we'll sell more of both," mostly due to the cost of analyzing the data (perople and technology). Now, several places are experimenting various possibilities for personalizing your experience, even to the point of having a system-generated shopping list dispayed on your cart, or figuring out that if you are buying avocados and onions you must be making guacamole and then remind you to pick up limes and suggest a certain (i.e., higher margin) brand of tortilla chips. I'm not sure I want to pay the higher prices at the stores that will have that technology, but I certainly find it fascinating.

As for privacy, I'm not too worried about my grocery store loyalty card. Medical and financial records? Definitely have some concerns there.

Posted by Carl Federl on 21 July 2009

Agree with Tim on Radio Shack always asking for my phone number but is rather a moot since they are the retail outlet for our four family cell phones.

Jewel-Osco has a very attractive customer loyalty but what do they do with all of that data?  Jewel's customer loyalty program has the following available only to members, so the advantages are too great to not enroll:

1)  Sale price are only available to members

2)  Coupons of $10 off on the next purchase are a regular benefit.

3)  Gas discount of 1 cent per gallon for each $10 of purchases.

4)  Store includes a 24x7 Pharmacy.

5)  Flu shots available in Pharmacy for a reasonable cost.

Posted by Steve Jones on 21 July 2009

It's an interesting debate. I know lots of people that are terrified of giving out things to the grocer. But they'll use a shared card they've scouted out online.

Honestly, is it that much of a problem for someone to know you buy beer or diapers? I guess insurance groups could look to raise your rates, and I'd be against them doing so.

However for most places I think those cards are a way to build a connection. They get you to think of that company. I go to QDoba every Sun after my baseball game for a burrito on the way home. Why not Chipotle? They don't have a loyalty card. It's a small connection, but it influences my behavior.

I have one for the two grocers near us, the pizza place, a few more. They're small, unobtrusive, I carry 4 or 5, use phone number for a few more. The local liquor guy even has one. No signup, nothing, just a stamp card. Those provide a connection that I appreciate, plus I like him.

The thing I am careful about is not giving away my birthday. I tend to use Apr 1 and a year or two off, just in case.

Posted by Steve Jones on 21 July 2009

I smell an editorial coming....

Posted by Andy Warren on 21 July 2009

Editorial would be good, I'd be famous by proxy! I do the same on birthday, and really giving my phone # out at retail. If forced to do so I always transpose the same two numbers - consistent identity, but they can't call me!

Posted by Jack Corbett on 21 July 2009

Interesting concept.  I typically don't worry about being tracked all that much.  Hey, if the store can use my buying habits to help them make a little more money by helping them better manage the supply chain. So be it.

The fake birthday/phone number is a good idea though.

Posted by Jay Florey on 6 August 2009

I'd like to add a dissenting voice on transposing phone numbers.  Twice in the past year I have been subject to harassing phone calls, once on my cell and once on my home phone, from companies who got my phone number by mistake.  If you give out a fake phone number you may be setting some poor soul up for relentless tele-marketing.

Posted by Rick Todd on 6 August 2009

So, I seem to be the first to speak from the other side: I am the architect of a system that analyzes the shopping habits of customers, and have worked with companies that do similar in the past. The main reason for a loyalty card for these customers, is it's an easy way to track you across multiple systems. Sure there are lots of ways to do it, but giving the customer a motivation to provide you with the correct info (hey, they want their points/discount/miles/whatever, right?) is crucial. By having a loyalty card, you're also not constantly asked for more personal, identifying information all the time, which benefits you.

Posted by JJ B on 6 August 2009

I go so far as to willingly pay more in order to avoid giving away my personal information.  

I will stop shopping at a store completely if the only way to get the sales price is to use their "I'm tracking you" card.  I was a loyal Albertsons shopper for years until they instituted their card system.  Now I happily shop at Fred Meyer.  They have a card system too, but you don't have to use it to get the sales price.  Their card system does not offer enough benefits to make it worth using, so I don't us it.  

On the other hand, I can get a free punch card from a yogurt place, not give out any info at all, and get a free sundae every 7th purchase.  They have my completely loyalty!

Posted by Andy Warren on 6 August 2009

Jay, that's a great point and hopefully I'm not the guy that did you wrong on those calls!

Posted by Andy Warren on 6 August 2009

Rick, I'd love to see you write about that if your business allows. Not just on the privacy side, but the data accuracy and whether it results in a gain for the business and the customer.

Posted by Andy Warren on 6 August 2009

I like punch cards myself. Analog, old fashioned, easy to lose - but they work. Though I suspect mostly for customers you'd get back anyway, but even rewarding loyal customers is worth a freebie here and there.

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