Personal Finance 

Retail Rewards: How Much is Your Privacy Worth?

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Recently, I read an interesting article on Yahoo! Finance provided by The Wall Street Journal. The article detailed the huge success of retail loyalty rewards programs. Tens of millions of consumers belong to these programs. Usually, you sign up for free, and have a barcode scanned, or your phone number entered, every time you go shopping. These programs reward you with coupons, sneak peeks, “secret” sales and other perks that usually results in discounts.

After reading the article, I went through my purse. I belong to a number of loyalty programs. One program allows me to get a discount on gas when I make purchases at my favorite grocery store. I also belong to a rewards program that sends me a $5 off coupon every time I spend $250 at the store. Since I shop there regularly anyway, this works out. I also belong to rewards programs at department stores and book stores. But is it really worth it? Sure, I get discounts, but what am I giving up in terms of privacy?

Retail Rewards: Tracking Your Every Purchase

Once you sign up for one of these rewards programs, you can then be tracked. Information about your purchases can easily be saved, catalogued and used to present you with offers that are more targeted. This helps increase retailers’ bottom lines, but it could also potentially be used for other purposes. What happens if information about your purchases starts getting reported to credit bureaus? Could your credit report begin reflecting your latest splurge?

While that is probably a bit on the alarmist side, the truth is that we are being tracked regularly — and we signed up for it. On top of that, what if the retailer sells your information to someone else? It’s a good idea to read the fine print on the program agreement you sign. Understanding the privacy policy is important if you are serious about limiting what information others have about you.

What About Identity Theft?

For me, one of the concerns is identity theft. The recent PlayStaion Network breach affected us. We ended up canceling the card that was on file with the PSN. We also received, by mail, an attempt to scam us. There is a surprising amount that can be done when someone gets a hold of your name, address, phone number and email address. You can easily begin receiving all sorts of phishing attempts and other undesirable attempts at scamming.

On top of that, what if someone opens an account using your name and address? While they might not be able to get a hold of a credit card without your Social Security number, they could start going to the gym with your name, or set up some services in your name. My parents once had utilities in Florida set up in their names — and they live more than 2,000 miles away from Florida! Identity theft is becoming more common, and the more places that have personal information, the greater the chance of being a victim.

You never know when a database is going to be hacked, turning over your personal information to someone unscrupulous. While it’s nice to get the discounts, before you sign up and start giving away your personal information, it’s a good idea to consider that you might be giving away more than you thought.

{ 13 comments, please add your thoughts now! }

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13 Responses to “Retail Rewards: How Much is Your Privacy Worth?”

  1. Shirley says:

    Thank you, Miranda, for a good post and the food for thought. We do have a rewards card at CVS Drugs and I had never thought about many of these possibilities.

  2. Jared says:

    I have numerous rewards cards. Thank you for frightening me.

  3. I was a hold out for so long on this. I did not want my spending to be tracked. Then it dawned on me that they were rather innocuous and I could get better deals when using them. I finally gave in and started using them when I realized that most store’s discounts were only if you had their cards.

    But there is one exception to the rule – Publix does not require a discount card to get the best deals.

  4. ptkdude says:

    I used to belong to Borders Rewards, and their privacy policy said they didn’t disclose into to other companies. A few months later, I started getting spam at the email address I gave Borders. That email address was never used anywhere other than Borders. So much for their privacy policy.

  5. Ron says:

    You are right on target with your concerns.

    Best to have an email address just for purchases and change it every few months. Sounds like a hassle but it’s really less of one than constant emails etc. from your recent purchases.

  6. govenar says:

    I’m not concerned about it.

  7. cubiclegeoff says:

    One thing that has been mentioned as an option is to sign up using a pet’s name, or something. Then they don’t have your real name for anything, and since most places don’t need to see your license or confirm your name, it doesn’t matter. We rarely go to a grocery store that has a loyalty card, but when we do, we use my wife’s which was set up 8 years ago under her old name, old address, old phone number, so it really doesn’t relate at all to us anymore.

  8. Shirley says:

    The grocery store where I worked tried this program for a while. You signed up with name, address, phone number and driver’s license number. You were given a wallet card and two keychain tags stating that if these keys were found they should just be dropped in any public mailbox and they would be delivered to the store for notification and return to the owner. We returned a LOT of keys!

    ** This was many years ago when the method of payment was by check or cash, and the unspoken goal was to have DL numbers in a registry so that when the card was swiped it would refuse a check that had an outstanding non-payment balance. **

    The immediate reward was access to the advertised sale prices. That soon bit the dust with negative feedback and the checkers were given a register card to swipe when the customer didn’t have and didn’t want a rewards card.

    The secondary reward was a coupon sent to your home for 5% or 10% off on a future purchase, depending on how much you had spent in that quarter. Mid-quarter a letter to be redeemed for a plant or gift was sent to the highest 1,000 spenders.

    As time passed and the store began accepting CCs, and stopped cashing other than single party checks, the program was no longer cost effective and was dropped.

  9. skylog says:

    i have thought about it from time to time, and i suppose try to only sign up for things i use, but, to he honest, i am starting to actually wonder what privacy means anymore.

    i wonder where we are heading as a society, especially when one considers what privacy means to the youngest generation these days.

  10. dePriest says:

    When I shop at the one grocery in our area that requires a card for discounts, I use a very old one. It is actually my sister’s, since I wouldn’t sign up just because of the privacy reasons. It has her very old address (she’s moved 10 times since), and an old phone number. I try to use cash whenever I shop there.

  11. libertyanne says:

    I use an old card where I shop. They didn’t require my ID to get it.
    Another store required my ID number and I refused to get one.
    I rarely go there but when I do I just try to borrow someone’s card who’s in line. Most are happy to do it since it adds “points” to their card toward certain rewards.

  12. Eyes Pie says:

    I never give my real name, phone number or email address for a simple “discount card”. Why should I? If a business really wants my business, my personal business is none of their business.

  13. Shirley says:

    One large store in our town finally gave up and attached a “store card” to the register for those who did not want to fill out the information.

    Before too long they just did away with the card all together.

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