The secret life of discount programs
A regular reader from Oz who wrote in with a topic question once before came up with another interesting topic idea, and I wanted to share it with you. Our reader writes:
I have been overwhelmed lately by the proliferation in "customer loyalty" programs here in Australia, and the pressure (blackmail?) retailers put on customers to join. Every time I buy something (clothing, shoes, bedding, a cup of coffee, a cinema ticket ... just about anything) the sales assistant asks if I'm a member of [insert name of retailer's] club or program, then tries to sign me up. I politely refuse, as I hate the idea of all these organizations adding me to their databases, tracking my purchases, and probably spamming me mercilessly. As I see it (and I may sound paranoid, but so be it!) "loyalty" programs are merely data mining exercises, aimed at finding out what makes customers tick so that they can be fleeced with increasing sophistication. Most people I know don't care (or don't know) about the data mining implications of signing up to these programs, and blithely accept every membership card going. Even small and seemingly unconnected businesses are getting in on the act ... the other day I bought some unscented shampoo from a little hippie-style health food shop, and they said "we have 20% off today for members ... want to join"?, and of course, looked quite shocked when I said no.
We don't have coupons (that I am aware of, at least) in Australia, but in some ways I think that the numerous "loyalty" programs are much more insidious, as there is no way of taking advantage of them anonymously. If you want the discounts, you are expected to hand over all sorts of personal data. For my part, I am, so far, accepting that I'll sometimes have to pay higher prices, and that this a choice I make in order to maintain my privacy. Maybe not a frugal choice, but one I am more comfortable with, than sharing my personal details with all and sundry.
Anyway, I'd be interested to hear what others think of these programs.
We also have these programs in the US, and they skeeze me out a little bit as well. I don't like the idea of offering up my personal data to make marketing more effective, but I do want the discounts. I have one loyalty card at the moment, and here's how I use it:
1.) I signed up using a fake name and fake demographic information. (I actually left most of the questions blank.) The clerk never even looked at my application.
2.) I never buy anything with the card unless it's already on sale. I like to think that that hinders the collection of useful data, but in all honesty I don't know if it does or not.
Do you use store loyalty cards? What do you think of the data mining aspect of these programs?
9 retorts:
I just spent a semester in a graduate level mktg class studying this and was astounded at the level of intelligence that is gathered on consumers. Unfortunately, yes, I do use customer cards because it is the only way to get the best price at the grocery/drug store. All of the stores I shop at have them. Even if your info is bogus on the card if you charge or use a debit card for your transaction they can still determine your shopping habits and analyze you. On the positive side, once your buying habits, preferences and patterns are established customized promotions and coupons can be marketed specifically to you. After I learned of this practice I had to laugh - you never, ever hear any brou-ha-ha in the news about consumers objecting to this yet there is a significant portion of this country which thinks the goverment has too many policies in place depriving individuals of their civil liberties. It is all a joke. But what are you gonna do?
Try CASPIAN.
http://www.nocards.org/list/supermarketlist.html
One of my favorite things is going to a shopper card swap. This is an event that encourage people to exchange cards, invalidating the data.
I wonder what Ralph's computers think when someone shopping for a baby and a family of 5 exchanges cards with a single person buying single person stuff (whatever that is) :)
I think it is an appropriate response to the privacy intrusion, and you still get the good deals.
As time goes by I am less and less inclined to sign up for these. I have the Safeway card and a couple others, but I don't much care whether they know what brand of milk I buy.
I too have been bombarded with offers from retail stores to both sign up for their "memberships" and for their "store credit cards" - which they are programed to tell you will get you the day's discount "even if you are declined for the card"! I can only imagine what a constant string of credit applications - especially rejected ones - would do to a credit score...
For a long time, I held out against these cards out of privacy concerns. Then I thought: "This is nuts. What sort of particularly revealing info would they learn about me anyway? It is only groceries, for God's sake!" So now I have cards for Tesco, Dunnes Stores (an Irish competitor to Tesco), and Boots. I DO NOT buy any prescription drugs at Boots, though. And I do feel that consideration moves in the shape of rebates, i.e. they are paying me for the info they are harvesting.
I am far more freaked by Amazon's targeted marketing. I buy quite a bit of out-of-print gay literature via Amazon Marketplace, and the idea that some database in Seattle is tracking these choices unnerves me in no small way. And I am not even getting rebates. But I do not know of another way of getting hold of these books.
Just my two cents.
I find that coupons are too often all for things I do not use, and almost never apply to generics. Additionally, in my area, ALL sales prices on groceries are tied to card use--if you don't use the club card, you don't get the sale price. And the sale prices are usually better than you can get with coupons, since no stores around here double coupons anymore.
Another plus is that my local store will often print out register coupons that are for items I actually purchase. These are far more useful than trolling the Sunday inserts and throwing out 95% of them.
Besides, it's just groceries. If you're so worried about them knowing what you're eating, just sign up with a fake name and address. They won't care, if they even notice.
Thanks everyone for your thoughts. I've been especially interested in this issue since I did a subject on data mining as part of a computer science degree, and realized what great lengths retailers go to in order to manipulate customers. A couple of people have suggested using fake details, and this sounds like an excellent idea - except that some of the programs actually require applicants to provide photo ID when they apply for the cards - so unless I get some fake ID (tempting) it would be hard to pull off. Thanks, Mapgirl for the info about CASPIAN - good site to know about, and comforting to know that there are others who don't want to sell their soul to the big food retailers. Goldsmith, I know what you mean about Amazon. I feel similarly uncomfortable about my local library's database - it's a wonderful library and I borrow loads of diverse and fascinating books. I'm not a terrorist, or any other type of criminal, but I do like to read about terrorism and crime, if only to better understand the world we live in. What if local intelligence agencies have access to borrowing records, and come knocking on my door next time there's a terrorist attack? I think these are risks we take, when we offer up personal information to organizations that stockpile it. Kym, you said "it's just groceries". Trouble is, it isn't. It's groceries, and clothing, and shoes, and movie tickets, and outdoor equipment, etc. etc. - just about everything I buy could be 5-15% cheaper if I signed up for the dozens of different "loyalty" cards on offer here. Some of the local department stores don't just stop at frequent buyer cards, but only offer discounts if you sign up for store credit cards. (I don't have any credit cards, and don't want to wade into that minefield. Guess they're missing out on my business). Anyway, it's been really interesting to hear others' thoughts on this topic. Cheers. And big thanks to FZ for writing about this. Perhaps it is time I did get that fake identity!
I love the idea of swapping cards with people! That's hilarious, and it totally leads to my kind of rebelliousness. I am less and less inclined to sign up for these kinds of cards as time goes on. I would rather have the insurance of knowing that I have some privacy, than save 20 cents but have the store know that I bought Tucks for a recurring hemorrhoid problem (for example).
Jerry
www.leads4insurance.com
Thank you for all the feedback! Special thanks to Oz Reader for the great topic idea.
Don't be shy: if there's something you want to see discussed here, feel free to send it to me at frugal (dot) zeitgeist (at) gmail (dot) com.
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