Why do insurance companies these days use loyalty card databases to track our eating habits? Information obtained by loyalty card schemes would be the envy of any information broker. The records collected concerning our buying practices currently are used for things such as custody hearings, psychological profiles, insurance claims as well as decisions that impact employment.
Retailers realize that they must earn our shopping allegiance. Supermarket “loyalty cards” are pushed on us which are supposed to help us obtain discounts on groceries. What they actually are is a behavior surveillance technology that is used to record and profile your grocery purchasing behaviors.
This data eventually gets into the hands of insurance companies that use it to increase your rates by linking your grocery expenditures with your chances of disease. They can then make use of this data to decline payment on your claims by saying that you are at fault because of your eating habits.
The reports that, “Marketing firms have sold this data to retailers and credit-card companies for years, and health plans have recently discovered they can use it to augment claims data”. reported back in 2002 that, “Thousands of supermarkets across the country have been offering loyalty cards to their customers for years”.
Frequent shopper programs are so common, that we now actually count on our retail stores to have such programs. There are more and more retailers hopping on this data-mining bandwagon. They are assembling huge amounts of data about us under the guise of trying to serve us more effectively. These stores now include many besides those in just the grocery or pharmacy industries.
The Worm on the Hook
Loyalty card programs base their success upon the fact that everyone really wants to save money whenever they can. You can bet that these companies are not in the business of giving away any money if they can help it. There has to be a reason why they are offering us discounts that would normally cut into their profit margin. It’s not just so that they can attract more customers either.
To use loyalty cards and be given savings we have to give up private details including our phone numbers, e-mail addresses, home addresses, age, gender, and any other information that they can receive. More and more these days, people are being asked to fill out forms with their personal information in order to be able to have access to something that they might need or want. Consumers are getting so accustomed to doing this that they are no longer wary about how their personal data will be used.
When you use loyalty cards, you are really just allowing institutions to invade your private life and pry into the most personal activities inside your home. It’s not just about saving you money. It’s about the retailers profiting from the data that they turn around and sell to any number of immoral organizations.
Many retailers give out discounts instantly at the checkout counter. Some tabulate savings over time and provide quarterly or yearly dividends. Others grant us gasoline discounts at the pump. Still others reward us with discount coupons that we can use on our next purchase that are geared to our product preferences. They now even encourage customers to cash their paychecks in their establishments as long as they provide private details including their social security and driver’s license numbers.
Are You Really Saving?
Loyalty card customers are beginning to realize that they are spending more for some things than buyers who are not included in the loyalty program or who are not using coupons. This is the latest trend of placing a price on loyalty. The concept is called customer-specific marketing, which is the ultimate objective of the supermarket industry. They realize that they need to provide special prices, yet they only prefer to provide these to select customer sectors that are either wealthy or that spend a lot of money in their retail stores.
Companies will punish normal customers by making them pay an excessive “full price” if they don’t have their loyalty cards. Stores that use these programs will usually raise the regular pricing of merchandise across the board. This ends up making purchases more expensive for all buyers. This is what is typically called “padding” by retailers. So the margin of a card member’s true cash savings is reduced to almost nothing.
They boast that they’re doing you a favor and yet they’re really just acquiring information which can be used to make the store more profitable. Once they figure out what types and brands of products that you purchase, they will only discount prices to loyal customers on rival brands. They gladly will give you discounts on related products that will help to increase your total purchases, though.
The Future is Already Here
Occasionally, vendors are now wanting us to link their savings card to our smart phones. This initially sounds like a great customer-friendly idea. This really is just an opportunity for these organizations to collect data from your cell phone and send it directly into the company’s customer database. Digital loyalty cards can open a user’s information to everyone when combined with services like FourSquare and open Wi-Fi networks.
If you print out a coupon from your computer or send it to your smart phone, it may seem that this can be a great tactic to lower costs. Once you provide the coupon at the store, they will include this data with other personal information about you held in their database. This can help them to build a profile about you which is so thorough that it would astonish any CIA agent.
Green Hills Farms, a NY state grocer, is going to launch a biometric “loyalty” and payment plan. A fingerprint is going to be necessary to access a kiosk designed to offer special discounts geared toward these people. During the 2011 holiday shopping season, some malls even tracked customer activity through their cell phone signals.
These days, they are even working on a new electronic product code (EPC code) which is able to identify individual items. It will replace the existing UPC code system which just detects groups of products.
The new EPC code system uses RFID chips that could be as tiny as a grain of sand and thinner than a strand of hair. They are integrated at production into the product or it’s packaging and tracked from that stage on (even into your home!). A couple of companies like Gillete are already using this in their product packaging.
Government Spying Becoming Legalized?
Under the new Cyber Intelligence Sharing and Protection Act (CISPA), the government could access a person’s information from a corporation and hand it over to the National Security Agency. This could lead to a stealth war against freedom loving Americans. It will become the new Patriot Act for the internet because this will herald the beginning of the death of the free internet.
There will be no more privacy of any information given to anyone. Everyone will be able to get their grubby hands on every little detail about each one of us from forms that we have filled out at stores and organizations to forms we have filled out online.
This new CISPA bill has already passed through the House of Representatives by a margin of 288 to 127 and is in the Senate for approval. Supporters for this bill are recorded as having spent 640 million dollars to have it pushed through the House while opponents have spent only 40 million. This bill also will include an Internet Sales Tax which will hurt the growth of small to medium sized business making over $1 million in revenue per year.
A similar bill already died once in the Senate last year. So this one is supposed to be better by addressing concerns about the last one which failed? You shouldn’t believe this for even a second. It will only end up being a slicker and more concealed way of stealing our personal information at any time they want to.
The stated purpose of CISPA is to make it easier for companies to share information about online attacks between each other and the government, letting them catch hacks early and better defend themselves. But there’s disagreement over whether it does so while protecting the privacy of ordinary people whose data is actually at risk of being exposed. If it passes, the government won’t even have to abide by a company’s privacy statements in order to access data.
Businesses will promise customers that they have “privacy protection” policies in place to shelter their private information. However, we don’t actually have any guarantee that our information won’t in some way be “accidentally” compromised or hacked. Now, if CISPA is approved by the Senate and signed by the president, this data mining will be legalized!
There are many options which you can take with such programs to secure your personal data. Here are a few of them:
- Fill out the specifics they require with false information. There is no obligation that you give out your true name and home address for their loyalty card. Use a name that you will remember and even make it amusing (i.e. “Joe King”) if you want.
- Find out the way to access your information and change it, when necessary. Discover what it will take to delete your information and if you will have a fee applied if this is done. Also find out if staff members get rewards for recruitment for their loyalty program.
- Check how the store controls access to your information.
- You can always refuse to sign up for a card or refuse their services. You can choose to opt-out of their “partnership services” or “special offers”. You must decide for yourself if savings are more valuable to you than your privacy.
- You can just decide to go shopping somewhere else. Support retailers that don’t implement loyalty cards or ask for extensive private information. Who knows? Often times you will find that such stores have honest lower pricing strategies.
Constitutional and Federal laws currently prevent government and police organizations from collecting personal information and generating databases. This could change with the new legislation being proposed. They have been able to skirt this issue so far by using the databases gathered by companies and organizations. Our nation is slowly developing into a total surveillance state.
We all need to be more aware of what is going on. Then we need to take the necessary steps to oppose this trend that is happening right in front of our eyes. They are doing this all by tempting us with better technology, promises of security, convenience and savings. Privacy is very important. If we ignore small gradual erosions to our privacy in the name of convenience, savings or safety, we risk a much larger overall loss which we wont be conscious of until it’s too late.
UPDATE: (6/24/2013) – Talk about tracking our eating habits! Now your doctor will really be able to make sure that your children (or you yourself) are receiving and ingesting their medications!
I wish you the best of “believing” in all of your future endeavors,
ROB – (admin)
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