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Supermarket cards trigger discounts and distress: Data collected can come back to haunt consumers
Seattle Post Intelligencer via Memphis Commercial Appeal ^ | May 12, 2002 | Jane Hadley

Posted on 05/12/2002 5:44:31 AM PDT by sarcasm

SEATTLE - You are rejected for health care coverage, your insurance company tells you, because you have a heart condition and your grocery store records show you have been filling your cart with potato chips and rich desserts.

If you persist in your lawsuit over your injury in the parking lot, you are told, your record of excessive alcohol purchases will be introduced as evidence you are basically a drunk, with nobody but yourself to blame for your fall.

Chatting with your neighbor in the grocery checkout line, you learn she has been offered a sale price for her peanut butter, whereas you will be charged full price. The reason? Your purchase records show you regularly buy peanut butter regardless of the price, while your neighbor buys it only when on sale.

Science fiction?

Not at all, says Katherine Albrecht, founder and director of C.A.S.P.I.A.N., a nationwide group that opposes use of "loyalty cards" by supermarkets because they record individual customer purchases. One of the above scenarios - a lawsuit involving Safeway - has already happened, and the other two are in the plans of some supermarket chains for their so-called "loyalty cards," she says.

The cards - also known by such names as club cards, discount cards, preferred cards or value cards - are a hot topic in the Seattle area because the supermarket QFC recently introduced its "Advantage Card," to the chagrin of some customers.

Wendy John, a graphic designer, says she will no longer shop at her nearby QFC, which she patronized for the past 21 years.

When she saw QFC's newspaper ad announcing the new Advantage cards, "My stomach just clenched," she said. "When QFC did this, it was just like, I can't do it. I won't do it. It's disgusting. They're just tracking my purchases. It has nothing to do with 'value."'

QFC spokesman Dean Olson declined to comment about the new cards.

Loyalty cards promise shoppers they'll get savings if they use the card to make their purchases. The difference in prices at QFC last week was substantial. A box of strawberries, for example, was $3.99 with the card and $9.99 without it.

The cards allow stores to keep track of what shoppers purchase, when they shop and where they shop. Most stores say they won't share the information with outside companies, but critics question that.

Ekhard Preikschat, a physicist who was born in Russia, and another man have leafletted 500 of his neighbors, urging residents to boycott QFC until the store gets rid of the new card.

"It's amazing to me how people are just willing to forgo all of their personal information," Preikschat said. "They ask these questions, and I say, 'You're out of your mind. I'm not going to give you that!"'

Preikschat says he believes Europeans have a much stronger sense of privacy than many Americans.

"Nobody here has gone through the kind of upheavals that people in Europe have. I just keep saying, 'This is 1938.' Everybody just falls in line. Everybody is just accepting what somebody's selling them here."

Some QFC customers signed up with few qualms.

"I never remember to carry coupons," said Melanie Renecker, who said she welcomed the cards as a handy way to get savings.

Jeannette Duwe, an Albertson's supermarket spokesman, says there's nothing sinister about what the store does with its card information. The Boise-based chain introduced the cards last year in Dallas-Fort Worth, the last grocer there to do it, but has not introduced them anywhere else.

According to Duwe, Albertson's is adamant about not sharing customer information with anybody else and says only one person within Albertson's sees the information. The purpose of the cards, she says, is to use the customer information to cut deals with vendors for lower prices.

"The only thing we ask for from people is their name and their address," said Duwe. "What that enables us to do is offer people special additional savings - coupons - via mail."

If the store identifies that you buy a lot of baby products, for example, the vendor of baby products gives the store a coupon to send you, Duwe said. That results in lower prices for those products, she said.

When Safeway introduced its club cards in 1998, promising savings by not requiring coupons, QFC said it would not follow suit.

Albrecht, the New Hampshire teacher who runs the C.A.S.P.I.A.N. (Consumers Against Supermarket Privacy Invasion and Numbering) group mainly through her Internet site - www.nocards.org - has been encouraging Seattle-area people who have signed up at the site to organize a protest. So far, 1,300 nationwide have signed up.

She maintains the reason Albertson's has not introduced the cards outside Dallas-Fort Worth is that a successful protest there slashed the chain's market share by 3 percent.

Duwe denies it, saying the market share study cited by Albrecht was for a different period.

"The support of the card has been much greater than we had anticipated," the Albertson's spokesman said.

Albrecht says she doesn't believe in lobbying the government for new regulations but rather in mobilizing consumers to make their feelings known in the marketplace by boycotting stores. Her Web site publishes a large list of stores with ratings ranging from the worst (stores that use cards and require an ID or Social Security number to shop) to the best (stores that promise they won't initiate a card program in the future).

Albrecht cites studies comparing the prices advertised before one major grocery chain's card started with advertised prices after the card's inception. It found that prices on 24 items were higher than before the card was introduced, prices on 13 items were lower and prices on 52 were equal.

"There are no savings with these cards," Albrecht said.

But she worries most about the privacy issue. A former privacy auditor who conducted 300 audits for a major accounting firm found that less than 20 percent of the companies complied with their own privacy policies, she said.

Company employees can release private information either through mistakes or corruption, Albrecht said, and companies have shown themselves eager to turn over the information they've collected to law enforcement agencies - sometimes without even court orders.

Safeway spokesman Brian Dowling said earlier this year that the store's records have been subpoenaed in the past, but "it isn't something that happens very often. We are careful to check that there is the force of the court behind the request."

Once a store has shoppers' identifying information, it can easily get detailed intelligence on other aspects of their lives, Albrecht said.

One Florida company markets "penetration profiles" to grocers that augment the grocery purchase data with a wealth of additional information about customers from outside databases. The company recommends that supermarkets attach the profiles to customer data files so they can better analyze the "geodemographic, psychographic and purchasing characteristics" of the customers.

Albrecht maintains that ordinary inventory management software provides stores all the information they need to effectively market their products without seeking data on individual consumers.


TOPICS: Culture/Society; News/Current Events
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1 posted on 05/12/2002 5:44:31 AM PDT by sarcasm
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To: sarcasm
We shop at Wally World (Wal-Mart) for groceries (except for their meat). Their regular prices usually beat the grocery's discount prices. And if we should pick up something on a card discount at the grocery, we always ring it up seperately from anything else we buy that's not on discount.
2 posted on 05/12/2002 5:49:10 AM PDT by mewzilla
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To: sarcasm
The grocery store I go to doesn't check ID when asking for info -- so you can get the cards in any name you feel like putting down. The kid at the register even said, "fill this out -- use any name you want."
3 posted on 05/12/2002 5:52:04 AM PDT by jlogajan
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To: jlogajan
I lucked out. I had no intention of getting a discount card but one day the check out girl gave me a card and an application and said just turn in the application next time. I have never filled out the application but the card works just fine.
4 posted on 05/12/2002 5:58:49 AM PDT by PFC
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To: sarcasm
Albrecht, the New Hampshire teacher...

It must be the cold winters :~)

5 posted on 05/12/2002 6:03:39 AM PDT by verity
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To: jlogajan
I just gave Safeway a fake name and address, and I've never had a problem because of it. I use a Safeway card when I'm buying groceries at my Virginia place so that I can get the United frequent-flyer miles. Not like I need them, because I fly enough already.

I don't use a card when buying groceries for my Georgia home.

6 posted on 05/12/2002 6:04:58 AM PDT by flyervet
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To: sarcasm
Boycotts rarely work, I suggest gumming up the works by each person applying for 50 cards in names found in a phone book from another city. Fight fire with fire, remember the only rule when doing things like this is there are no rules. Soon the cost should outweigh any benefit for these stores to do business this way. Besides it is fun to screw with the system.
7 posted on 05/12/2002 6:06:54 AM PDT by TightSqueeze
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To: sarcasm
Just try grocery shopping in Hawaii without a card! Cards are an absolute *must* there. It's gratifying when a clerk tells you how much you saved on your purchase and it's in double digits. When my husband flys there I make him take the grocery cards with him. I figure with our bizarre diet and lifestyle we really mess up the system :)
8 posted on 05/12/2002 6:07:30 AM PDT by pops88
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To: jlogajan
Good idea. BTW I used YOUR name and address to fill out my application.
9 posted on 05/12/2002 6:07:53 AM PDT by AppyPappy
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To: sarcasm
I have a son that refuses to shop anywhere a card is necessary for a "sale"

These cards are such scams..wanna know how they get your address for those junk mailers? That is one of the places.

No one needs to know what you buy or where.

10 posted on 05/12/2002 6:08:09 AM PDT by RnMomof7
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To: sarcasm
I quit going to CVS last year when they started with their "Extra Care" card. Even moved my prescriptions out of there. All of these "savings" cards" are simply a way to lock the non-carrying card customer out of the savings. And that savings can be major if you buy a lot of items. Result, the store can offer sales and still get full price from those no-card customers. The old way, everyone got the savings. Maybe the stores make ***more*** money w/ this gimmick.

As far as their claim that they aren't tracking--what idiot believes that? Nancie

11 posted on 05/12/2002 6:11:54 AM PDT by Nancie
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To: sarcasm
The store where I do most of my shopping has had these cards for years. You get huge in-store savings by using it. My shopping habits are so ordinary & healthy, I am not concerned about what they learn about us. It is also their check cashing card.
12 posted on 05/12/2002 6:12:33 AM PDT by Ditter
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To: sarcasm
So who in their right mind would ever pay $9.99 for a box of strawberries??
13 posted on 05/12/2002 6:18:30 AM PDT by berkeleybeej
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To: sarcasm
Winn Dixie just implemented these cards here in Florida. I almost went into mourning over it, because I have shopped at WD for 18 years or more, since they had the lowest prices of any major food chain in our area (until the Super WalMart came).

Now I no longer even enter their store, or look at their ads. I don't care to know how much I am being ripped off because I don't "sign up" for one of their cards. The prices of their "sale" items, without the card, is just horrendous; their signage is extremely confusing, and frankly, I just don't have the time to have to figure out what I'm paying for an item.

When I told the girl I wanted the address to complain to, she asked "but why wouldn't you want the card?" I replied, "Yesterday I was good enough to get a sale price here every day, and today I'm not because I don't have a stinkin' card?"

I now shop as WalMart for everything but meat, as someone else has said, and go to loss-leaders at other stores for that.

But Winn Dixie has lost even that for me...I don't bother with them. Food Lion has never had my business because of their card.

Hope they miss my $450 a month in grocery money, 'cause I sure don't miss their 50 cents off of yellow squash...I get it cheaper somewhere else now.

14 posted on 05/12/2002 6:22:52 AM PDT by Dakotabound
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To: Ditter
On the other side of the coin, they are paying you for the information via the discounts when using the card. I've had instances where the "paid me" close to five bucks on one grocery trip.

If you're buying some "unmentionables", go incognito. Don't use the card and they won't know you from Al Gore's brother.

P.S. I don't care if my eating habits leak out. It is well-known in this neighborhood that I spend every sunset sitting on my porch eating a bowl of mayonnaise.

15 posted on 05/12/2002 6:26:01 AM PDT by capt. norm
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To: capt. norm
I don't see anything sinister here. What kind of unmentionables could I buy at the grocery store? Lots of butt wipes perhaps? Depends? Drool buckets? Pennie pads?
16 posted on 05/12/2002 6:31:40 AM PDT by Ditter
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To: Ditter
Exactly! Good grief, I've saved a bundle over the years with my check cashing card, and I'm certainly unconcerned about the crux of this article. I throw away junk mail, and I have caller ID....... I think I'll make it through to another day.
17 posted on 05/12/2002 6:31:49 AM PDT by JENINMO
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To: Dakotabound
Why don't you buy meat at Walmarts?
18 posted on 05/12/2002 6:32:20 AM PDT by CindyDawg
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To: PFC
I have had a discount card from Kroger's for about two years. I didn't have to complete a form. They just gave me the card without requesting any personal information at all, not even a name. If I had to fill out a form with name, etc., I wouldn't have taken the card.
19 posted on 05/12/2002 6:34:09 AM PDT by Skooz
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To: sarcasm
I filled my card out in the name and ad. of X42. The card works fine.

One small problem. The grocery chain was running a 'give away' contest. Every time you used the card, you got another chance.

Anybody notice if Clinton is driving a new Buick LeSabre? THAT would pi$$ me off.

20 posted on 05/12/2002 6:35:32 AM PDT by Vinnie
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