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Big Brother In Your Grocery Cart?
By Laurel Holliday
Jun 06, 2002 -- QFC Tests Customer Loyalty With New Advantage CardQFC created quite a media storm with the recent introduction of its "Advantage Card," a barcoded, wallet-sized card, presented at checkout, that electronically tracks each purchase made by customers. Anyone who reads the dailies or listens to talk shows is probably well aware of the controversy surrounding "loyalty cards."
Ballard Market director Steve Williams says he thinks QFC's rollout of the loyalty cards has brought his store new customers. "Right now, it looks like we're picking up some business," he says, "because there is a group of people who are very against that kind of marketing."
QFC is not the first grocery chain to play the card game in Seattle; Safeway has been tracking its customers' purchases with the Club Card for years. By linking purchases with personal information that cardholders provide on their applications--name, address, phone number, e-mail address, marital status, gender, number in household, age, etc.--it's possible that the two grocery chains know more about their customers than their own families do.
So, what's the big deal if some mega-corporation knows which brand of deodorant we buy ... or if we never buy any at all? That depends on whom consumers choose to believe. Safeway and QFC say they collect the data purely for marketing, and that they won't sell the information they gather about us. But some privacy advocates, like Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), warn that we have no guarantee that the loyalty card operations won't change their privacy policies and sell our personal information to the highest bidder, just as Internet retailers have done.
"Amazon and Qwest changed their privacy policy," says Michael Cawdrey, co-owner of Fremont Fresh Market, a medium-sized, family-owned grocery store that opened three years ago in downtown Fremont. "We have been against loyalty cards from the beginning... There is no signed agreement that these stores won't sell the information in the future. I think there is definitely a vocal minority who have a strong point to make about the cards, and I think they should be listened to."
"We listen to our customers," he adds. "We don't report to Wall Street."
| For more information about loyalty cards: |
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For an excellent resource on the issues surrounding loyalty cards visit: http://www.nocards.org/news/index.shtml For information on surveys/studies on comparisons between cards and no cards: http://www.nocards.org/savings/comparison.shtml http://www.amadorbooks.com/nocardsi.htm Here's an article on data mining: http://www.eco.utexas.edu/~norman/BUS.FOR/course.mat/Alex/ Article on the Klever Kart, loyalty cards, and privacy http://www.charlotte.com/mld/observer/business/2688508.htm |
Rumor has it that Fred Meyer will soon follow in the footsteps of QFC and Safeway with its own version of loyalty cards because, like QFC, it's owned by the Kroger Company, the largest supermarket conglomerate in the United States.
Fred Meyer corporate spokesman Rob Boley will neither confirm nor deny these rumors. "We would consider any kind of merchandising strategies proprietary," he says.
If that kind of corporate-speak doesn't exactly invite you to shop there, you can always go to Albertson's Food and Drug, right? With 2,500 stores in 36 states, the second largest food chain in the country began issuing loyalty cards, which it calls "Preferred Savings Cards," to customers in Texas this past November. Was that the start of a nationwide program?
According to Albertson's corporate spokesperson Jeannette Duwe, the store is "currently looking at other markets to introduce the Preferred Savings Card."
She would neither confirm nor deny the possibility that those "markets" include the Seattle area.
The giant warehouse stores Sam's Club and Costco have always required membership cards. Spokespersons for both companies acknowledge that every purchase is tracked electronically in order to mail targeted ads and coupons to customers. Both claim that their companies do not sell the data to outside corporations.
PCC Natural Foods is a member-owned cooperative with several Seattle stores, whose members are issued cards that are scanned through a barcoder at the checkout counter. But, said PCC public affairs manager Trudy Bialic, the cards do not generate a record of what each customer purchases. When PCC first applied bar codes to its cards in 1996, members made it very clear that they didn't want their individual purchases tracked. For PCC customers, Bialic says, knowing that their food is fresh and locally produced is far more important than getting discounts like the loyalty card stores are offering.
Madison Market, a Seattle co-op with 7,000 members, has membership cards as well. Members can get lower prices by scanning their cards, but their individual purchases are not recorded, says general manager Rob Martin.
Martin thinks the negative reaction to QFC's institution of loyalty cards can be attributed to the fact that QFC used to be locally owned and operated; Seattleites are disappointed that it was sold to the Kroger conglomerate, which is pushing loyalty cards.
Ron Nakata, co-owner of Ballard Market and the Central Market in Shoreline, says his store has no plans to go to the loyalty card system, but he is concerned about what QFC's move portends. "Is the landscape going to change so much that we'll all have to have that card?" he says.
Nakata sees QFC's new policy in ominous terms that go farther than just purchase-tracking. "It's a deliberate, strategic move on their part to lose some of their customers," he said. The customers who leave because of the card are the customers they don't make money on. The idea is to cater to those shoppers who spend the most."
Spokespersons for Larry's Market, Trader Joes, and Whole Foods Market all say their stores have no plans to introduce loyalty cards.
CASPIAN's Seattle media spokesperson, Thad McArthur, recently spoke out in opposition to supermarket loyalty cards on the May 19 "KING 5 Up Front" program. McArthur says that a KING 5 producer told him that shortly after the show aired, QFC pulled all its advertising from KING 5. Prior to the episode, the station had been running numerous QFC ads touting the introduction of The Advantage Card.
Vice President and General Manager of KING 5 Dave Lougee declined to comment. "We never talk about corporate advertising," he said.
Dean Olson, QFC's Northwest corporate division spokesman, was also mum about the decision to stop advertising with KING 5. "We don't chat about things like that," he says. "Information about our advertising is completely private company information."
CASPIAN will be holding a demonstration against the use of supermarket loyalty cards from 10:00 a.m. to noon, Saturday June 15, at the QFC located at 1401 Broadway. For an education on the uses of the cards, visit the group's website (see sidebar).
Laurel Holliday is a freelance writer in Fremont who is a frequent contributor to The Seattle Press.
Reader Comments
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| Kay Robins | Sep 13, 2003 | Edmonds, WA | dental hygeinist |
| I too hate loyalty cards, unfortunately I have no choice but to use them. I always give a fake name and next time I am going to use the name Joe Cardhater on Caspian Way. I hope Kroger goes out of business. -K. Robins | |||
