Club cards - the dark side
Discussion
Is there a dark side to the supermarkets club card type systems. We done use any point collecting systems, considered signing up given that we spend thousands at supermarkets yearly, am not afraid of using them ;) but thought Id put it to the PH masses...
I always believed supermarkets did and do use your details, selling the info on (legally, its part of their T&C) to life insurance companies and the like. I drink, smoke, and recall hearing stories in the past.
What the bottom line? Surely there is more to it than just loyalty points?
IIRC, I recall hearing a case (dont remember the details) of a man being found guilty of some drinking related offense - in which he would not have been found guilty if his club card didnt put the final nail in the coffin, prooving he bought drink regularly (or something similar?)
I always believed supermarkets did and do use your details, selling the info on (legally, its part of their T&C) to life insurance companies and the like. I drink, smoke, and recall hearing stories in the past.
What the bottom line? Surely there is more to it than just loyalty points?
IIRC, I recall hearing a case (dont remember the details) of a man being found guilty of some drinking related offense - in which he would not have been found guilty if his club card didnt put the final nail in the coffin, prooving he bought drink regularly (or something similar?)
There is some info at www.nocards.org some of it is a bit OTT but the stores can and do use the storecard info. If the cardholder offers didn't pay in the long run they wouldn't do it!
Examples include:
product choice - easy for stores to see who is buying different products. Having contextual pruchasing data for each item greatly increases the value of the data. The retail industry is making the most of recent developments in Business Information tools.
buyer profiling - grouping buyers based on purchasing habits.
offer targetting - the offer vouchers that come through the post from the companies are targetted at you based on your buying history. They tend not to be items you usually buy (as you will buy them anyway) so they can entice you to spend a bit more.
By identification of the profitable buyer groups (those buying premium or non-loss leading products) they can price accordingly those items which they know will be brought regularly - often upwards.
The Nectar card is an example of how far it can go. The vendors involved have huge amounts of behavioural data over and above what they could collect on their own. This info is also of interest to other groups http://yro.slashdot.org/yro/05/01/29/030223.shtml?tid=158&tid=187
Examples include:
product choice - easy for stores to see who is buying different products. Having contextual pruchasing data for each item greatly increases the value of the data. The retail industry is making the most of recent developments in Business Information tools.
buyer profiling - grouping buyers based on purchasing habits.
offer targetting - the offer vouchers that come through the post from the companies are targetted at you based on your buying history. They tend not to be items you usually buy (as you will buy them anyway) so they can entice you to spend a bit more.
By identification of the profitable buyer groups (those buying premium or non-loss leading products) they can price accordingly those items which they know will be brought regularly - often upwards.
The Nectar card is an example of how far it can go. The vendors involved have huge amounts of behavioural data over and above what they could collect on their own. This info is also of interest to other groups http://yro.slashdot.org/yro/05/01/29/030223.shtml?tid=158&tid=187
Living in a supermarket family (Dad is a Director and launched Irelands first scheme, brother is logistics mgr, I've done a stint too) I know quite a vast ammount of the running of these loyalty card systems.
The main drive behing them is loyalty, as the name suggests. They reward customers who repeat purchase in a particular chain. The main idea being that there is generally a number of major players in each town/city that a consumer can use. It costs nothing for the consumer to switch the "supplier" of their groceries, and it is an increasing trend for consumers to chop and change on a regular basis.
Therefore, loyalty cards were introduced to protect a supermarkets customer base.
Some of the points mentioned above are largely true, but many have been blown out of proportion by tabloid style rumour mills. In Ireland anyway, it is illegal to pass on your information to any other company without your consent. This is covered in EU law and so should not be much different in the UK.
Consumer targeting is a big part of the card systems and is a valuable tool to the supermarkets. Whats the problem with recieving special offers tailored to a group of customers. Generally, as stated, some of the products are products you don't buy, however, there is always a split between those you don't buy and those you do. If there was only offers for the products you don't buy, then this would lead to alienating the consumer.
Buyer profiling in order to group buyers is of no use what so ever. Targeting is done on a running basis so these "groups" would be out of date very quickley. Also, profiteering by increasing the price on the products that "you" buy is a non-runner as well. Think about it, supermarkets have known what sells well for years, it's their job to know this. Knowing WHO buys them makes no difference to pricing, loyalty cards did not effect this process in any way.
Using purchasing information in order to convict someone would be extremly difficult. Like Gatso cameras, there is no-way of knowing who used the card for what purchases. Many people bunch together - students usually - onto one card to maximise the benifits, so proving that you bought these products and not your wife/friend/brother/sister/whatever would require more than just reciepts.
Ultimatly, it is not in the interest of the supermarket to abuse this information. If evidence got out that a supermarket, or any other company using loyalty cards, was using information for illicit purposes, the backlash by consumers on that company would be huge, and that is too big a risk to take.
Hope that kind of clears things up a bit.
Brian.
The main drive behing them is loyalty, as the name suggests. They reward customers who repeat purchase in a particular chain. The main idea being that there is generally a number of major players in each town/city that a consumer can use. It costs nothing for the consumer to switch the "supplier" of their groceries, and it is an increasing trend for consumers to chop and change on a regular basis.
Therefore, loyalty cards were introduced to protect a supermarkets customer base.
Some of the points mentioned above are largely true, but many have been blown out of proportion by tabloid style rumour mills. In Ireland anyway, it is illegal to pass on your information to any other company without your consent. This is covered in EU law and so should not be much different in the UK.
Consumer targeting is a big part of the card systems and is a valuable tool to the supermarkets. Whats the problem with recieving special offers tailored to a group of customers. Generally, as stated, some of the products are products you don't buy, however, there is always a split between those you don't buy and those you do. If there was only offers for the products you don't buy, then this would lead to alienating the consumer.
Buyer profiling in order to group buyers is of no use what so ever. Targeting is done on a running basis so these "groups" would be out of date very quickley. Also, profiteering by increasing the price on the products that "you" buy is a non-runner as well. Think about it, supermarkets have known what sells well for years, it's their job to know this. Knowing WHO buys them makes no difference to pricing, loyalty cards did not effect this process in any way.
Using purchasing information in order to convict someone would be extremly difficult. Like Gatso cameras, there is no-way of knowing who used the card for what purchases. Many people bunch together - students usually - onto one card to maximise the benifits, so proving that you bought these products and not your wife/friend/brother/sister/whatever would require more than just reciepts.
Ultimatly, it is not in the interest of the supermarket to abuse this information. If evidence got out that a supermarket, or any other company using loyalty cards, was using information for illicit purposes, the backlash by consumers on that company would be huge, and that is too big a risk to take.
Hope that kind of clears things up a bit.
Brian.
up-the-dubs said:
Therefore, loyalty cards were introduced to protect a supermarkets customer base.
initially yes, but the data is now being used for other purposes
up-the-dubs said:
Some of the points mentioned above are largely true, but many have been blown out of proportion by tabloid style rumour mills.
Absolutely.
up-the-dubs said:
In Ireland anyway, it is illegal to pass on your information to any other company without your consent. This is covered in EU law and so should not be much different in the UK.
Same in UK, however IIRC the Nectar scheme allows the data to be used by the companies involved - not all & sundry
up-the-dubs said:
Consumer targeting is a big part of the card systems and is a valuable tool to the supermarkets. Whats the problem with recieving special offers tailored to a group of customers. Generally, as stated, some of the products are products you don't buy, however, there is always a split between those you don't buy and those you do. If there was only offers for the products you don't buy, then this would lead to alienating the consumer.
Buyer profiling in order to group buyers is of no use what so ever. Targeting is done on a running basis so these "groups" would be out of date very quickley. Also, profiteering by increasing the price on the products that "you" buy is a non-runner as well. Think about it, supermarkets have known what sells well for years, it's their job to know this. Knowing WHO buys them makes no difference to pricing, loyalty cards did not effect this process in any way.
Regarding the WHO buys pricing approach & the offers systems, my experience at high street retail clients tells me differently - however from what you are saying it looks like things are different in supermarket/grocery retail.
The group profiling does take place at a couple of my clients - It is only recently that the processing power & tools have been available to crunch the amount of data to do this effectively within a reasonable timeframe.
up-the-dubs said:
Using purchasing information in order to convict someone would be extremly difficult. Like Gatso cameras, there is no-way of knowing who used the card for what purchases. Many people bunch together - students usually - onto one card to maximise the benifits, so proving that you bought these products and not your wife/friend/brother/sister/whatever would require more than just reciepts.
Ultimatly, it is not in the interest of the supermarket to abuse this information. If evidence got out that a supermarket, or any other company using loyalty cards, was using information for illicit purposes, the backlash by consumers on that company would be huge, and that is too big a risk to take.
The thing is that they are not using it illicitly or nefariously imo. They are not hiding what they are doing & all of the activities are what you would expect from a retailer. From a privacy perspective, my concerns are that through these schemes it is very easy to build up a lot of personal info on an individual. I choose not to do this & but have no complaints about how they are run for those who do - nothing is being hidden.
I've always thought myself that if the supermarkets really had their customers best interests at heart then they'd bin the loyalty card scheme and use the savings to knock a penny or two off the price of a tin of beans or a loaf of bread.
Of course, I know nothing about how they work or why they use them.
>> Edited by $lowpoke on Monday 30th May 11:30
Of course, I know nothing about how they work or why they use them.
>> Edited by $lowpoke on Monday 30th May 11:30
bga said:
offer targetting - the offer vouchers that come through the post from the companies are targetted at you based on your buying history. They tend not to be items you usually buy (as you will buy them anyway) so they can entice you to spend a bit more.
At the moment we are conducting a little experiment.
The offer vouchers which say, for example, spend £x in one transaction and you get quintuple green shield stamps and a kick in the wossnames. Mrs Fif has been scheduling purchases to take advantage, not buying any more stuff. (that's what she tells me anyway)
The amount £x has got to a very large number now, that I say it's taking the pee. Like yesterday we did one very large monthly shop / stock up and still didn't get to amount £x, even before staff discount.
So we are refusing to use the vouchers for a few months and see if £x reduces. Q for those in the know, any chance do you reckon?
yes there is a dark side to them, they p### me o## because they slow down the paying process and infuriate me, hence they have a dark side.
i go to a supermarket to buy food, as a requirement to live and wish to spend as little of my own time in there as possible. i don't want to be bombarded with questions...how do you wish to pay, do you collect points, are you collecting for bla, bla. and people who pay by card need to be taken round the corner and given a bit of horoscope reading.
i once wrote to a well known supermarket head office quoting an interview by their then Chairman suggesting a cash only, one basket only, no cards checkout, for the "time poor and cash rich" shoppers and got a load of guff back in response...clearly not in the chains financial interest...the cards aren't in the shoppers' interest either i surmise.
i go to a supermarket to buy food, as a requirement to live and wish to spend as little of my own time in there as possible. i don't want to be bombarded with questions...how do you wish to pay, do you collect points, are you collecting for bla, bla. and people who pay by card need to be taken round the corner and given a bit of horoscope reading.
i once wrote to a well known supermarket head office quoting an interview by their then Chairman suggesting a cash only, one basket only, no cards checkout, for the "time poor and cash rich" shoppers and got a load of guff back in response...clearly not in the chains financial interest...the cards aren't in the shoppers' interest either i surmise.
[quote=$lowpoke]bin the loyalty card scheme and use the savings to knock a penny or two off the price of a tin of beans or a loaf of bread.[/quote]
Loyalty card schemes cost retailers a surprisingly little ammout of money. All the special offers and bonus points type promotions are being paid for by the supplier as a form of advertisment. Much more effective than mailshots or print ads as the comsumer is targeted directly. The retailer weighs up who is to be the recipiant and forwards on the offer.
[qoute=FiF]So we are refusing to use the vouchers for a few months and see if £x reduces. Q for those in the know, any chance do you reckon?[/quote]
Probably not. The retailer must reach a certain monetary value in order to recoup the cost of the offer. Whatever the product that you are saving for is, it still has to be paid for somehow. Saving stamps schemes are popular as the consumer can "see and feel" what they are collecting, rather than a printout on their receipt.
edit: no-idea whats up with the quotes
>> Edited by up-the-dubs on Monday 30th May 16:20
Loyalty card schemes cost retailers a surprisingly little ammout of money. All the special offers and bonus points type promotions are being paid for by the supplier as a form of advertisment. Much more effective than mailshots or print ads as the comsumer is targeted directly. The retailer weighs up who is to be the recipiant and forwards on the offer.
[qoute=FiF]So we are refusing to use the vouchers for a few months and see if £x reduces. Q for those in the know, any chance do you reckon?[/quote]
Probably not. The retailer must reach a certain monetary value in order to recoup the cost of the offer. Whatever the product that you are saving for is, it still has to be paid for somehow. Saving stamps schemes are popular as the consumer can "see and feel" what they are collecting, rather than a printout on their receipt.
edit: no-idea whats up with the quotes
>> Edited by up-the-dubs on Monday 30th May 16:20
Flat in Fifth said:
offer targetting - the offer vouchers that come through the post from the companies are targetted at you based on your buying history. They tend not to be items you usually buy (as you will buy them anyway) so they can entice you to spend a bit more.
At the moment we are conducting a little experiment.
The offer vouchers which say, for example, spend £x in one transaction and you get quintuple green shield stamps and a kick in the wossnames. Mrs Fif has been scheduling purchases to take advantage, not buying any more stuff. (that's what she tells me anyway)
The amount £x has got to a very large number now, that I say it's taking the pee. Like yesterday we did one very large monthly shop / stock up and still didn't get to amount £x, even before staff discount.
So we are refusing to use the vouchers for a few months and see if £x reduces. Q for those in the know, any chance do you reckon?
from what I have seen I doubt it - pretty much what up-the-dubs said. Supplier funding agreements for sales & promotions reduces financial risk to retailer on most offers (and a very arcane area which is wide open to fraudulent dealings by employees!)
Flat in Fifth said:
So we are refusing to use the vouchers for a few months and see if £x reduces. Q for those in the know, any chance do you reckon?
If I don't use my tesco clubcard for 3/6 months (it was in an old wallet) they sent me about 50 credits of shopping vouchers to "tempt me back"
Nectar on the other hand didn't...
Our handiest local Supermarket is Somerfield. They have a 'Saver' card. No points or other arseing about, just real deductions made at the till when you present it.
For instance " That'll be £24.31 please. Do you have a Saver card?"
Sparky proffers card which is then keyed in." Thank you, that'll be £21.85"
Now I know the prices must be loaded to start with to enable them to do this, but as a maketting gimmick it's pretty good. People think they are being 'rewarded' for their loyalty.
For instance " That'll be £24.31 please. Do you have a Saver card?"
Sparky proffers card which is then keyed in." Thank you, that'll be £21.85"
Now I know the prices must be loaded to start with to enable them to do this, but as a maketting gimmick it's pretty good. People think they are being 'rewarded' for their loyalty.
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