Search This Blog

Powered by Blogger.

Blog Archive

Labels

Showing posts with label Supermarket Loyalty Card. Show all posts

Here's How Supermarket Loyalty Cards are Exploiting Consumers Weakness

 

Certain supermarket loyalty schemes, according to critics, are taking advantage of the cost of living problem by offering high discounts only to those who sell large amounts of personal data.

Customer privacy is becoming a "luxury" for many struggling households because shoppers who want to protect their private data are being charged a premium by certain supermarkets, who refuse them access to offers enjoyed by those signed up to loyalty schemes, they have warned. 

A review of the privacy rules of the UK's two largest grocery chains, Tesco and Sainsbury's, discovered "disturbing" uses for shopper data concealed in the fine print. 

According to privacy group Big Brother Watch, Tesco's Clubcard scheme and Sainsbury's Nectar programme are able to create detailed profiles of customers' preferences and spending habits that can be sold to other companies, which can target the public with specific advertisements based on shoppers' purchase histories. 

Although directly identifying information such as names and membership numbers are removed, the data is granular enough to feed into "hyper-specific targeting" in the form of personalised advertising it claimed. 

Based on the research, Tesco and Sainsbury's both connect access to discounts to data sharing and are "the worst offenders" among the UK's top supermarket retailers for selling on the data.

With extreme food price inflation and skyrocketing energy, fuel, and transportation bills pushing millions of households to the breaking point, shoppers' ostensible freedom of choice when deciding whether to join loyalty programmes that offer members deep discounts in exchange for detailed data may be limited.

Tesco, the grocery chain with the largest market share, has recently revamped its Clubcard scheme, shifting away from offering rewards such as treats and days out to aggressively discounting products specifically for loyalty card holders in order to compete with budget rival Aldi. 

Customers are informed through store signage and advertising that those who do not participate in the initiative will pay more for a variety of products. Essential commodities such as cereal, cheese, and nappies are significantly cheaper for customers willing to share their data. 

Tesco discloses to customers the data it collects and the various third parties with whom it distributes this information in a long privacy policy document.

In addition to "identity" data such as Clubcard holders' names, titles, residences, and phone numbers, the shop collects information about their bank accounts, payment card details, and transaction history. "This includes when, where, what, and how you purchased that product or service," according to the document. "We may share personal data with...our retail partners, media partners, and service providers."

Big Brother Watch stated that shoppers were "effectively paying a premium to protect their data" and that "customer privacy is becoming a luxury." 

It is concerning that some supermarkets are exploiting a cost-of-living crisis by forcing shoppers to trade more and more of their personal data in order to access discounts that were previously available to all, said Jake Hurfurt, a spokesman for the group. 

There is a serious risk that shoppers will feel pressured into handing over their data if the trend of requiring a loyalty card to access any special offer continues.