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Loyalty cards = discounts for shoppers and data for retailers


Published:   |   Updated: July 13, 2014 at 07:11 AM

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Points, perks, discounts and rewards programs come in many different names on credit-card sized loyalty cards and key fobs.

A swipe of a loyalty card at the checkout gives the shopper a discount on a store special, points toward future purchases or gas discounts, but also provides the retailer with data on each customer’s buying habits.

While retailers say the information is used to optimize the shopping experience for their customers, they also provide personal information to third parties and to law enforcement upon request. Many retailers also track your visits to their websites.

Thomas Moore, who lives in Sebring 10 months of the year, has about half-dozen loyalty fobs on his key chain.

After shopping at the north Sebring Walgreens, Moore said he knows retailers gather information about his shopping habits, but he is in the habit of using the cards.

“I use it all the time; Every time I come in; I don’t care if I get anything off; I just use it,” Moore said.

He showed his cards for ABC Fine Wine and Spirits and Mariano’s, a grocery store in the Chicago area where he lives for two months of the year.

Anna Martinez, of Sebring, also uses loyalty cards when she shops.

At Walgreens you get points and then you can buy something, she said.

“Today I bought two coffee [canisters] for $5 and I got 1,000 points,” she said. “So maybe I can get something free or for less money.”

Walgreen Co., with 81 million members, has the nation’s largest loyalty program, but started its program after many of its competitors.

Before acquiring New York drugstore giant Duane Reade in February 2010, Walgreens had no loyalty program, even as countless competitors, including Rite Aid and CVS, aimed to grab more consumer dollars through their own programs, according to an October 2013 Advertising Age report.

In 2013 Walgreen Co. branched out into collecting information on its customers’ physical activity by linking their exercise-tracking devices to their loyalty accounts.

The Walgreens point of sale (customer checkout) database includes information that appears on a receipt tape, such as product SKUs and prices, the time and date of the purchase and payment method, said Adam Holyk, vice president of insights and analytics at Walgreen Co. That info is connected to an ID, “which allows us to understand our customers and really inform our price-promotion and assortment decisions,” according to Advertising Age.

Walgreen Co. Media Relations representative Phil Caruso noted the rewards program’s benefits to their customer.

It’s an innovative loyalty program that offers easy enrollment, instant points and endless rewards, as well as ways to get, stay and live well at Walgreens, he said.

Customer information will be protected in accordance with the online privacy and security policy and/or the notice of privacy practices, as applicable, Caruso added.

Winn-Dixie has issued loyalty cards for a number of years and has been expanding its gas rewards program, called “fuelperks” by promoting it as a way to “turn groceries into gas.” In contrast, Publix has no loyalty card program.

Publix Media and Community Relations Manager Brian West said, Publix has never had a loyalty card.

“We believe all our customers should have the same opportunity for savings. No cards, no forms, no hassles,” he said.

Loyalty data uses

The information gathered from loyalty cards has many uses as noted in a May 2014 report from Canadian Grocer.

Disease detectives were able to spot and halt an outbreak of hepatitis A infection in 2012 in British Columbia by comparing the foods the infected people had bought in previous months. Food purchasing histories compiled from grocery store loyalty cards identified pomegranate seeds in a frozen fruit mix as the cause of the infectious outbreak, the report showed.

Last year the Pittsburgh-based Giant Eagle grocery store chain began requiring all customers to use their Giant Eagle loyalty cards when they use the self checkouts.

A 2013 Consumerist report notes that Giant Eagle says the requirement is being done to benefit the customer, but others believe it is intended as a deterrent against theft, which is a concern at self checkouts.

In contrast to the proliferation of loyalty card programs, New England’s Shaw’s supermarkets dropped its loyalty program in 2013.

A July 2013 Boston Globe report stated that by ending its loyalty card program, Shaw’s is making itself an exception in an industry that thrives on “parsing, analyzing and sometimes even selling the data these initiatives supply.”

To run a successful loyalty program, a company needs to think more about the data than the discounts, industry insiders said, according to the Boston Globe report. The Springfield, Mass.-based grocer Big Y uses the data to determine what items their most loyal customers purchase often and keep those products in stock, even if they are not particularly popular with the general population of shoppers.

Checking those privacy policies

Winn-Dixie, CVS and Walgreen Co. have lengthy privacy and security policies, which explain what entities are provided with personally-identifiable information from their customers.

For example Winn-Dixie Stores, Inc.. states it may provide personally identifiable information to outside vendors for analysis, verification, revision, consolidation or storage, but only to enable Winn-Dixie to use the information more effectively in serving its customers.

Winn-Dixie may also provide this information to regulatory, law enforcement or other governmental entities upon proper request.

Also, under an appropriate contract, Winn-Dixie may make personally identifiable information available to a third party so the third party may join with or assist Winn-Dixie in providing promotions or services to our customers.

Retailers are also gathering data on those who view their websites.

The CVS policy states, “We collect information about your activity on our sites and through our advertisements using technologies such as cookies, including third-party cookies, web beacons and server log files.”

CVS states it uses the automatically generated information, as well as other information, to provide its customers with an “optimal website experience. This includes measuring the effectiveness of our ads and your interactions them, and tailoring offers and advertisements to you for products or services you may find helpful on our sites and third-party sites.”

mvalero@highlandstoday.com

(863) 386-5826

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