Should I Be Paranoid About Grocery Store Loyalty Cards?

A reader writes in (slightly edited):

I'm wondering about your perspective on grocery store loyalty cards. One of the major grocery chains in my area switched to a loyalty card program. They send out a flyer with great looking prices, but unless you have "the card" no special prices for you.

I refuse to get a store loyalty card. I don't want a company to be able to track my purchases and link them back to me. Our health insurance recently launched a "healthy savings" program, where you scan your membership card with your purchase for trivial savings off selected processed "healthy" foods, things like crackers or yogurt of the week. I can only imagine what they would do with that data to drive up my health insurance rates. Moreover, most of our summer veggies are home grown or from our CSA, so we aren't even buying these healthy foods at the local megamart. Just curious about your two cents.

Even after all of the consumer empowerment articles I’ve written here, I’m embarrassed to say I’ve actually never once addressed the pros and cons of grocery store loyalty cards.

Admittedly, the savings can be extraordinary. That’s the key reason we use our grocery store's loyalty card. Sure, it’s possible the store could use our purchasing information against us. But the only thing to come of it so far has been targeted coupons--some of which we actually use. However, you could also say that I've clearly learned nothing from all those years watching The X-Files.

So here’s the question: Is it reasonable to be paranoid about grocery store loyalty cards? When a store keeps data on what we buy, what stops The Man from using it against us?

For some answers, I sounded out friends and followers on Twitter and Facebook, and wound up with an intriguing range of responses. See what you think:

1) I am not quite sure how this logic works. How can a store use against you the fact that you bought bread, milk and eggs on Wednesday? Using this logic, people should get rid of credit cards because the bank knows when and where they spend their money.

2) I use loyalty cards if I get rewards. Do not mind my choices being tracked as long as I do not get spam mail! I guess I accept tracking as part of our modern, higher tech life.

3) It's a good idea for a dystopian novel, but the convenience and potential benefit of targeted coupons seems much higher to me.

4) They will use it against you in terms of knowing your habits. They’re learning how to sell you more stuff, or when to increase prices on must-have items.

5) They sell the data to (or share it with) other companies. Same thing with online marketers sharing their mailing lists. You end up getting junk mail from places you never signed up for. This is not paranoia. It is real.

6) When I worked for the world's largest market research company 5 years ago, the data they collected contained no personal information (e.g. name, address, etc.). It was simply code references, as in: this code bought this item. That may have changed now of course so I would say - "if there is personal data of course it can be used." Then it is simply a matter of whether or not you "choose" to be paranoid about it. If you "choose" to be paranoid then do not use the cards. If however, you "choose" to not be paranoid and have faith and confidence in the holder of your personal data then you may have a less stressful day thinking about it. Businesses of the 21st Century are beginning to understand the power of consumer relationships, it's not just a short term profit. Consumers can react very quickly and badly when this confidence is broken and I believe very few ethical companies would choose to break this consumer confidence as their business can depend on it.

Readers, now it's your turn. Do you use grocery store loyalty cards? Do you have privacy concerns about them? Why--or why not?


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