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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.


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To: TightSqueeze
I live in Las Vegas and shop at Albertson's, which has no cards, and Vons, where I have a card under a fake name. But you're right, why not more cards, under more fake names? Good idea.
21 posted on 05/12/2002 6:35:42 AM PDT by samtheman
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To: capt. norm
Decades ago, pre-home computer, 60 Minutes did a story one how easy it was to reconstruct lives from check stubs and rummaging through trash cans. It was able to tell the family in the story how much they drank, the quality of what they drak, what they ate, what they did for entertainment and a host of other things. Now enter the computer age. If someone took the time you could recontruct someone's life. The threat to personal data has always been there ever since we started dumping trash.
22 posted on 05/12/2002 6:35:47 AM PDT by Dutch Boy
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To: CindyDawg
Myself, I have have a hard time buying my food at the same place I buy my underwear. I must have "issues".
23 posted on 05/12/2002 6:38:00 AM PDT by Coastie
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To: CindyDawg
Why don't you buy meat at Walmarts?

Good question. They have some of the best steaks on the planet. The best piece of meat I have ever put in my mouth was a huge T-bone I bought at Wal-Mart. I marinated it in Stubb's Steak Marinade for a day, cooked it slowly on the grill...... Oh man, I want a steak for lunch now.

24 posted on 05/12/2002 6:40:22 AM PDT by Skooz
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To: Dutch Boy
Yeah, you're right.

The pitiful part is that I lead such a dull life that I'm pretty sure they can't re-construct anything exciting out of it. Fortunately I'm originally from Iowa so I've gotten used to it. If my name ever turned up in National Enquirer, it would only be because they had finally worked their way all the way to the bottom.

25 posted on 05/12/2002 6:43:04 AM PDT by capt. norm
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To: capt. norm
MAXIMUM SURVEILLANCE

If you think That's bad, how many times have you said something by email that could be taken out of context and make you awful? Or maybe you just said something thoughtless - it's an informal medium after all. Well now, your ISP will be commanded to send all your email to the feds, thanks to this sneaker bill that needs to be STOPPED. I'd post it up front but I'm new. I hope it gets wider circulation.

Not only will the govt use it to harass dissidents, as they just did with their no-fly list, I am Certain this info will get into the hands of corporations. Maybe when you're about to be hired for a great job the personnel dept. will be reading something inane you said and forgot three years ago. Maybe your insurance rates will go up because dissidents will be found to have more accidents by some insurance company statistician. (They already get to look at your credit rating to boost rates).

And of course, if you say something against Anyone in government from time to time, it will be stitched together to make you look Really bad, and you'll go to the lockup until you can prove the hoax. We'll have to speak like real old ladies and say Nothing inoffensive.

I can understand the need for increased security, but not to the point that we throw away the freedoms millions died for in some absurd panic. More people die in auto accidents every year than were ever killed by terrorists, but we don't ban automobiles.

http://www.internetnews.com/isp-news/article/0,,8_1080171,00.html

New Bill Will Increase ISP Surveillance of Users By Roy Mark

The House Judiciary Committee passed a bill Wednesday that would subject Internet users to greater surveillance by Internet service providers (ISPs) and stiffen penalties for cyber crimes. Under current law, ISPs can face civil damages for disclosing user activity unless that activity presents an immediate risk of death or injury. Under H.R. 3482, the Cyber Security Enhancement Act of 2001, ISPs would be able to report threats that are "not immediate" and be protected from privacy violation lawsuits.

ISPs would face penalties for not storing customer electronic records, including e-mail, for at least 90 days. The bill now moves to the House floor for a full vote, although no date has been scheduled.

Following a year of widespread computer virus attacks and post-Sept. 11 heightened security concerns, the bill, introduced by Rep. Lamar Smith (R.-Tex.), aims to better coordinate cyber security efforts between federal, state and local agencies, make information more readily available to law enforcement agencies and slap harsher penalties on cyber criminals.

Criminal punishment for cyber crimes is currently based on the amount of economic damage caused by the attack. Smith's legislation would allow the U.S. Sentencing Commission to consider a perpetrator's intent and whether sensitive government data is involved in the crime.

The bill also directs the Attorney General, acting through the Federal Bureau of Investigation (FBI), to establish and maintain a National Infrastructure Protection Center to serve as a national focal point for threat assessment, warning, investigation, and response to attacks on the nation's critical infrastructure, both physical and cyber.

It further establishes within the Department of Justice (DoJ) an Office of Science and Technology to work on law enforcement technology issues, addressing safety, effectiveness and improved access by federal, state, and local law enforcement agencies. The bill abolishes the Office of Science and Technology of the National Institute of Justice, transferring its functions, activities, and funds to the newly formed DoJ office.

May 9, 2002

26 posted on 05/12/2002 6:45:13 AM PDT by bloggerjohn
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To: Dutch Boy
Buy with cash and heat with wood (old receipts , letters, bills, etc once burnt cannot be used to reconstruct your life by a dumpster diver ).
27 posted on 05/12/2002 6:45:20 AM PDT by hoosierham
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To: sarcasm
I don't have any grocery cards, and I find that more than half the time the cashiers will swipe their own cards when they realize I don't have one. So I get some savings, and all the privacy.
28 posted on 05/12/2002 6:45:29 AM PDT by Vince Ferrer
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To: jlogajan
Commercial (as opposed to civil) disobedience such as yours can only result in more demands for a national ID, the smartcard (cashless society) and eventually the implanted biochip. Making things difficult for our system of Fascilism will not be tolerated.

Regards

J.R.

29 posted on 05/12/2002 6:51:00 AM PDT by NMC EXP
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To: Coastie
I'm not going to worry until they start tracking my bulk purchases of tin foil.
30 posted on 05/12/2002 7:05:27 AM PDT by Procyon
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To: hoosierham
I SAVE all of my receipts and statements (just anal retentive in that way, I guess), and I shred everything else.

Staples has great shredders for about $50 that just sit on top of your wastebasket and automatically turn on to shred whatever you stick in them. (No, I don't own Staples stock.)

31 posted on 05/12/2002 7:07:22 AM PDT by PackerBoy
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To: Coastie
Easy solution to your concern. Buy your drawers at Kmart. They could use the business and won't ask you about your issues. You don't even need a card! LOL
32 posted on 05/12/2002 7:42:24 AM PDT by CindyDawg
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To: sarcasm
So the only folks who can get this information is the government. But the data is held in strictest confidence. Which will it be? These two statements contradict each other.

And I'm sure some $20,000 a year clerk at the store can't possibly be bribed to "accidentally" release certain data to interested parties. Especially when the store employees leave the purchase lists laying on the tank of the breakroom toilet.

I'll forgo the dubious "savings" that comes with these cards. Better yet, when you're approached to apply for one of these things, lie. Give them a phony address, name, phone number, everything else. Corrupt data is worse than no data at all.

33 posted on 05/12/2002 8:50:08 AM PDT by IronJack
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To: capt. norm
They have for years paid us for buying things by lowering their prices to attract business. They do not need to track individule purches to pay us for shopping. So now they triple their prices for non-card holders and pay us by charging regular prices for card holders?? This is discrimination.
34 posted on 05/12/2002 9:03:24 AM PDT by Khepera
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To: Khepera
I see what you mean.

Shell Game at work here. While you're watching the "savings hand" the other hand is going through your wallet (records, etc.).

35 posted on 05/12/2002 9:09:55 AM PDT by capt. norm
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To: bloggerjohn
Good post and something we should all take notice of.
We should all contact our Congresscritters and urge them to vote 'nay' on H.R. 3482, the Cyber Security Enhancement Act of 2001.

Welome to FR, newbie.

bloggerjohn member since May 12th, 2002
 

36 posted on 05/12/2002 9:25:47 AM PDT by Bloody Sam Roberts
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To: sarcasm
It seems to me, SLAGGING by any other name or mechanism is still at least REAL CLOSE to being SLAGGED. '

Made in God's image, I consider it an insult to Him to be made into an IT, a thing, a commodity to be manipulated, spindled, folded and enslaved.

Self-respect and free-choice, thank you. Nothing else seems to qualify for the label of LIFE.

37 posted on 05/12/2002 9:29:41 AM PDT by Quix
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To: sarcasm
I shop at places where you don't actually need to have the card with you. Just punch in your phone number.

I punch in someone else's phone number. I get the discount, they get the accumulated goodies, and the store's database gets screwed up.

38 posted on 05/12/2002 11:27:18 AM PDT by Karl_Lembke
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To: sarcasm
I know a group of folks in SanFrancisco that regularly swap these cards with each other once a month. The result being - they get the discounts - and the grocery store can not effectively track the purchasing patterns - since over a 12 month period the kinds of purchases range all over the place.

That might be a more effective way to protest these cards and their potential abuse of privacy issues

39 posted on 05/12/2002 3:01:46 PM PDT by somena2001
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To: somena2001
BTW - I have another friend who once posted an interesting idea on usenet.... He feels the same way about your Social Security number andd all of these privacy invading inoventions like store cards...

Billy wrote: "The second part has to do with relinquishing the SSN to anyone and everyone who takes it seriously. It's no mistake that I've published mine here many times. Anyone can have it if they want it, because I don't need it and I don't use it.

Let the *feds* figure out who "430-21-4093" is.

Billy

That would work just as well as swapping grocery cards.

40 posted on 05/12/2002 3:13:17 PM PDT by somena2001
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