What’s in your basket?
Rewards programs collect, share data on your habits
As a member of more than two dozen loyalty programs, Stephen Weyman often gives marketers a digital glimpse into his private life. And that’s just fine with the frugal shopper who’s fanatical about collecting all the points he can.
“To me, it’s a good trade-off for the perks many of those programs offer,” the software developer says of purchase details that are recorded every time he uses a loyalty card. “They give you something directly for it.”
Weyman, who runs a website called How To Save Money, is referring to deals and discounts that are geared to his needs and preferences. In particular, he’s a huge fan of Shoppers Drug Mart’s Optimum program. He certainly feels the “big discounts” outweigh any small loss of privacy.
The Moncton, N.B., resident points out that prying eyes already peer into our personal space, thanks to Facebook, Google and surveillance cameras.
But should he worry about personal information snared by loyalty programs?
That depends, says David Fraser, a wellknown privacy lawyer in Halifax, N.S.
Some loyalty programs share personal data with third parties and some don’t.
Usually the program backers simply want a better understanding of consumers and their buying habits, he says, drawing a comparison with the old-time general store proprietor who could alert interested customers to an expected shipment. Collecting digital data “allows businesses to do that on a much grander scale.”
But he cautions consumers to be wary of circumstances where merchants can collect “pretty intimate information.”
For example, he says, do you want your marketing profile to include details about your birth-control purchases? If not, then you are better to pay cash and keep that membership card in your wallet.
Reputable organizations take privacy issues seriously because they don’t want to lose customers’ trust, says Fraser, who has personally enrolled in hotel rewards programs for convenience and better service. He adds he’s not aware of any marketers abusing this information.
However, many Canadians appear to be worried about privacy, an industry report shows.
Close to half of the 6,500 consumers sur- veyed this year by Maritz Canada Inc. cited privacy concerns as a reason for not joining any more loyalty programs, says Rob Daniel, vice-president of loyalty and research for the Mississauga company.
That represents a 10-per-cent increase over last year’s figure, he says, suggesting the increase may be due to recent high-profile breaches in privacy.
To ease consumers’ concerns, merchants need to be transparent about collecting personal data, keep it secure and communicate how it will be used, Daniel says. “Otherwise, they are red flags to the consumer.”
Pretty much everyone collects points. The survey found that 92 per cent of Canadian consumers are a member of at least one loyalty program.
Privacy is a priority at Air Miles Canada, says president and CEO Bryan Pearson. Air Miles does not use that data unless it has the customer’s permission to do so, he says.
Now 20 years old, Air Miles is the mother of loyalty programs. It has 10 million collectors, or about two-thirds of Canadian households.
In a survey last year, two-thirds of those asked said they’d be willing to give more information in return for bigger benefits, Pearson notes. Pretty much no one opted out of receiving targetted offers.
A swipe of an Air Miles card records the location, merchant or sponsor, date of the purchase, and the number of miles earned.
Pearson says the retail partner, such as a store or gas station, might record purchase details so they can inform customers about products and service.
Shoppers Drug Mart gathers personal data from the almost 10 million members of its 12-year-old Optimum program.
“We know what’s in their basket,” says Tammy Smitham, vice-president of communications and corporate affairs. “And we know the details of their transactions. We can target these individuals with offers for products we know they like to buy.”