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What Does Your ZIP Code Say about You?

Every few months, I receive coupons for baby formula in my mailbox — despite the fact that my only child is now 10 years old. I also receive the random copy of America Baby. And, until recently, I had no idea why Family Circle started showing up at my house monthly.

Now, though, after reading stories on CNN Money [3] and NBC News [4], I suspect that these are attempts at marketing based on my ZIP code.

You probably already know that information in your credit report is used to market items to you. Credit card issuers, personal lenders, and insurance companies all use information garnered from your credit report to send you marketing mail [5]. But your ZIP code can also provide information to marketers that use “big data” to get information about you and your habits.

What Information Does Your ZIP Code Provide?

Anyone looking at the general statistics surrounding my ZIP code would assume that I have either just had a baby or that I’m pregnant. In my neighborhood, I’m one of the few women under the age of 35 who isn’t pregnant, or doesn’t have a child under the age of two (there are also many moms in my young neighborhood who are pregnant and have children under the age of two).

Someone marketing baby formula, trying to sell toddler items [6] and looking for the “typical” stay-at-home mom would certainly send their free samples to my ZIP code — and assume that I fit right in.

Those who collect information about consumer habits compile information based on the information provided. The NBC story points out that:

When you swipe a credit card at the cash register, the merchant receives your name, card number and expiration date, but little else, [Paul] Stephens said. Give the store your ZIP code, however, and you’re providing a valuable piece of the puzzle.

When paired with your name, it can help the merchant figure out your mailing address, phone number and specific demographic information, Stephens noted.

That means more marketing items in your mailbox, and more telemarketers calling your phone. It means more targeted sales pitches aimed at trying to get you to buy what someone else is selling.

How Else Could Others Profile You?

But it’s not just about marketing. There are some concerns this type of information could lead to more consumer profiling behaviors. Until a few years ago, most consumer buying habits were profiled in the form of credit agency reports [7]. Someone looking at your situation would look at your payment history and debt level, and a few other items, and then make a decision about you.

Now, though, Big Data can help marketers and others figure out what types of consumer items you are likely to buy, based on your ZIP code. They can pair your buying behavior when you swipe your plastic with what others in your geographic area are buying. They can get an idea of other habits as well.

Already, social media profiling [7] is used to get an idea of what kind of friends you have, and the activities in which you engage. But what if more information could be extracted from your ZIP code and other information you provide. If you are friends with a lot of folks who are in debt, perhaps you are in debt, too. Or perhaps you engage in other behaviors.

This type of consumer profiling is already being used overseas in some cases. With all of the data collected on you every day, it’s possible for just about any business to get a fairly comprehensive picture of what makes you tick.

What do you think? Is there too much data collection going on? How do you feel about stores selling your ZIP code information to data crunchers?

Photo: 38 Degrees [8]